First Sensor AG Sponsored Research
Germany | Technology Hardware & Equipment Investment Research
Full Company Report Reason: Company newsflow 17 May 2018
Accumulate Narrowing the profitability gap to peers from Share price: EUR 23.90 The First Sensor group (FIS) is an established sensor producer with leading closing price as of 16/05/2018 market positions in clearly defined strategic target markets. During the next Target price: EUR 27.00 years the group will benefit from various megatrends related to different industries. Based on its outlined strategy the group will reach a sustainable, Upside/Downside Potential 13.0% higher level of profitability in our view. Furthermore the group will remain a Reuters/Bloomberg SISG.DE/SIS GR strong cash flow generator. The strong share price performance since the Market capitalisation (EURm) 244 beginning of 2016 already partly reflects the positive outlook. We initiate our Current N° of shares (m) 10 coverage for the First Sensor shares with an Accumulate rating and a target Free float 59% price of EUR 27.00 per share. Daily avg. no. trad. sh. 12 mth 29 Daily avg. trad. vol. 12 mth (m) 742.95 Price high/low 12 months 11.15 / 30.50 Abs Perfs 1/3/12 mths (%) -2.05/6.70/105.15 Benefitting from some megatrends: FIS serves three strategic target markets Key financials (EUR) 12/17 12/18e 12/19e which are Industrial, Medical and Mobility. Industry 4.0 will change the Sales (m) 148 157 168 philosophy of production and sensors and sensor systems definitely will play an EBITDA (m) 20 23 23 important role. In Medical E-health applications are on the rise, while in Mobility EBITDA margin 13.3% 14.4% 13.9% EBIT (m) 11 12 14 autonomous driving, among other factors, is in the centre of First Sensor's EBIT margin 7.2% 7.9% 8.0% interest. Net Profit (adj.)(m) 4 7 8 ROCE 6.0% 7.0% 7.6% Five pillar strategy: The profitable growth strategy is based on five pillars: 1) Net debt/(cash) (m) 23 20 15 Target Markets Industrial, Medical and Mobility where FIS will benefit from Net Debt Equity 0.3 0.2 0.2 several megatrends. Therefore more customised products and solutions will be Net Debt/EBITDA 1.2 0.9 0.6 Int. cover(EBITDA/Fin.int) 10.6 10.5 10.8 developed. 2) Key customers and products: The benefit will come from better EV/Sales 1.7 1.7 1.5 economies of scale. 3) Forward Integration: Selling more systems and solutions EV/EBITDA 12.6 11.8 11.2 which offer a higher margin potential. 4) Internationalization: Entrance and EV/EBITDA (adj.) 12.6 11.8 11.2 penetration of new markets in North America and Asia. 5) Operational EV/EBIT 23.4 21.4 19.2 P/E (adj.) nm 35.6 31.9 excellence: Cross sectional function for better margins. P/BV 2.8 2.8 2.7 OpFCF yield 1.2% 1.9% 2.9% Profitability uplift: With regard to EBIT-margins FIS harvested first fruits, as Dividend yield 0.7% 0.8% 0.8% can be seen in the EBIT-margin 2016 of 6.6% (2015: 0.9%) and 2017 of 7.2%. EPS (adj.) 0.40 0.67 0.75 Mid-term we estimate a level of >9% while the company is aiming for ~10% on a BVPS 7.91 8.42 8.99 sustainable level, what is not out of reach in our view. DPS 0.16 0.18 0.20 Shareholders FIS a strong cash flow generator: The operating cash flow margin in the last DPE Deutsche Private Equity GmbH 36%; Teslin Capital Management BV 5%; two years came out higher than 10%, combined with a favourable cash conversion rate >"1" (2013: 3.8x). We expect this level to continue so that
vvdsvdvsdy32 financing of the growth, in addition with other financial sources, is secured in our 30 28 view. 26
24
22 Reopening of dividend payments: After ten years without paying dividends for 20 2017 the management made the proposal to the AGM to pay EUR 0.16 per 18 16 share (payout ratio of 40%). We interpret this as a sign of confidence to capital 14 12 markets that First Sensor is on the right track. 10 Apr 17 Mai 17 Jun 17 Jul 17 Aug 17 Sep 17 Okt 17 Nov 17 Dez 17 Jan 18 Feb 18 Mrz 18 Apr 18 Mai 18 Source: Factset Key risks comprise among other factors: 1) FIS might not keep the speed with FIRST SENSOR AG SDAX (Rebased) regard to new, innovative products and as a result could lose market share over Analyst(s) time. 2) FIS will not meet timely all defined milestones of their overall strategy Winfried Becker [email protected] plan what can result in a lower than expected profitability. 3) Hiring of new and +49 69 58997-416 skilled employees could become more challenging.
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First Sensor AG
CONTENTS
First Sensor at a glance 3 Investment case in charts 4 Investment case and SWOT analysis 5 Valuation 7 DCF valuation 7 Peer group analysis 9 Company profile 12 Company overview 12 First Sensor's strategy for growth 12 Segment Industrial 15 Segment Medical 16 Segment Mobility 17 Market environment 19 Financials 23 Earnings analysis 23 Financial analysis 25 List of abbreviations 28
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Exhibit 1: First Sensor at a glance
Business Units Industrial Medical Mobility
A wide range of standardized and customized sensors in such applications as First Sensor offers solutions measuring pressure, flow, liquid level, oxygen, In the segment Mobility, First Sensor develops and manufacturs sensor Products/ length measurement, radiation and security, Smart Building, industrial process light, radiation and acceleration for such areas as breathing and respiration, devices in such applications as advanced driver assistance systems (ADAS) applications control and aerospace dialysis, endoscopy, and diacnostics. and OEM pressure sensors and camera solutions
A broad range of industrial end-markets OEMs for medical devices Automotive OEMs and large suppliers, retrofitters Customers
Daimler Trucks, VW, FUSO, Volvo, Renault, Paccar, Hella, Delphi, Velodyne, A broad customer base of c. 2.000 business clients Roche, Fresenius, Siemens, Draegerwerke Autoliv, Kenworth, DAF, Navistar, Western Star
No concrete figures disclosed; most likely above average position pressure Market share/ No concrete figures disclosed; most likely strong position in industrial pressure Most likely strong position in pressure and flow sensors; optical sensors (e.g. LiDAR systems) with strong growth in upcoming positioning sensors and optical sensor solutions years
A) Miniaturization of medical technology, B) increasing demand for intelligent Drivers A) Development of Industry 4.0, B) Demand for process automation solutions, which analyse and communicate the measured data, C) general e- A) Autonomous driving, B) Green mobility health trend
Main Hamamatsu, Amphenol Advanced Sensors, Excelitas, Detection Technology, Honeywell, all sensors, Merit Sensor, OSI Systems, Sensirion Bosch, Hamamatsu, Excelitas, Sensata Technologies competitors Smi Pressure Sensors
Entry barriers/ Positioned in strategic target markets which are of limited interest for large players; FIS covers the entire value chain for sensor solution systems; focus on individual solutions for specific customer needs; higher pricing power for sensor competitive advantage system solutions due to high complexity; lower pricing power in the direction of suppliers;
Strategy: Higher profitability Guidance 2018e (First Sensor): equinet Estimates Consensus EUR 150-160m EUR 157m n.a. (I) Targets and Markets Revenue: Revenue: y/y 1.7% - 8.5% y/y 6.4% n.a. Strategy & (II) Key Customer & Products Guidance (III) Forward integration EBIT 7.0% - 9.0% EBIT 7.9% n.a. (IV) Internationalization
Sales (EURm) 147.5 EBITDA (EURm) 19.6 EBIT adj. (EURm) 10.6 Sales 5Y hist. CAGR 5.7% 2017 Margin 13.3% Margin 7.2% Organic growth y/y n.a.
Sales split by region Sales split by division Group sales development
200 10.0% 10% 0% DACH 8.0% Industrial 150 12% 30% Other Europe 6.0% Sales & EBIT 100
Split m EUR 50% 4.0% North America 51% Medical 50 2.0%
28% Asia 0 0.0% 19% Mobility 2015 2016 2017 2018e 2019e 2020e
Other Industrial Medical Mobility EBIT margin
CEO Dr. Dirk Rothweiler CFO Dr. Mathias Gollwitzer Shareholder structure CEO (appointed until end of 2019) CFO (appointed until 2022)
DPE Deutsche • Background in physics • Head of group controlling, EnBW Priv ate Equity Shareholder GmbH structure & • EVP Optical Systems at Jenoptik • CFO Mercedes-Benz France SAS 36% management • Vice President Sales & Service at TCZ • Head of Corporate Controlling, DaimlerChrysler AG Free Float • MD Asia-Pacific for Süss Microtec AG 59%
Teslin Capital Management BV 5%
# of employees 798 (FTE) FY 2017
Source: First Sensor, equinet Research; Customers: solely equinet Research
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Investment Case in Charts
Exhibit 2: Long-term perspectives for sensors Exhibit 3: FIS active in 4-5 sensor market segments
6% Industrial 5% 36% Automotive 8% Consumer
Medical
21% Aerospace and Defence Other 22%
Source: Yole Développment Source: AMR, BCC, R&M, equinet Research
Exhibit 4: EBIT-margin improvement long-term … Exhibit 5: … and short-term
200.0 organic growth since 2012 40.0% 60 15.0%
160.0 10.0% 20.0% 40 120.0 5.0% 0.0% EUR m EUR 20
EUR m EUR 80.0 0.0% -20.0% 40.0 0 -5.0%
0.0 -40.0%
Q2 2015 Q2 2016 Q1 Q1 2015 Q1 2015 Q3 2015 Q4 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1
Q3 2018e Q3 Q2 2018e Q2 2018e Q4 Revenue EBIT Margin Revenues EBIT Margin
Source: First Sensor, equinet Research Source: First Sensor, equinet Research
Exhibit 6: FIS a strong cash flow generator Exhibit 7: EBIT-margin and multiple landscape
30 Hamamatsu 30.0 Photonics 25 Jenoptik ams AG Melexis 20.0 First Sensor 20 10.0 Integrated OSI Systems TE Connectivity 15 Device Technology
EUR m EUR 0.0
Elmos Sensata 10 Technologies -10.0 Semiconductor Detection
Technology EV/EBIT 2018e 5 -20.0 0 0% 5% 10% 15% 20% 25% 30% 35%
Operating CF Operating FCF EBIT-Margin 2018e
Source: First Sensor, equinet Research Source: FactSet, equinet Research
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First Sensor AG
Investment case and SWOT analysis
The First Sensor group currently holds leading market positions in its defined strategic end- markets. These markets have high entry barriers for other medium-sized companies and volumes most likely are too small for the large players in our view. The company covers the entire value chain for sensors and related systems. Looking forward, First Sensor is well positioned to benefit from some megatrends like for example autonomous driving or Industry 4.0. By benefitting from these trends the current strategy is directed to a higher margin level and in 2016 and 2017 the group could harvest the first fruits of this program. Nevertheless the margin level is still behind to some of its listed peer group companies. The share price performance since early 2016 reflected already the increase in First Sensor’s profitability. Since the beginning of 2016 to date the share price showed an impressive performance of 95% and clearly outperformed the TecDax with an increase of 43%. Year to date the First Sensor shares are up another 11.2%. From this perspective it seems that some of the positive expectations are already included in the current share price level.
Exhibit 8: First Sensor: Three years performance Exhibit 9: First Sensor: One year performance
Prices as of 16.05.2018 Prices as of 16.05.2018
Further triggers for the share price in our view are any signs for a further sustainable margin improvement. These signs can be for example the winning of new high volume OEM customers, new product innovations, internal cost savings measures or entering new markets. The macro picture in Germany and Europe shows first signs that the current boom is normalizing. The April figure for the German Ifo climate index declined to 102.1 index points. It is the fifth month in a row with declining figures. It is our impression that the German economy is slowing down but currently far away from a recession. Pessimists might raise the question later this year, if a soft landing or a sharp move towards a recession is the correct scenario.
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Exhibit 10: First Sensor: SWOT – analysis
STRENGTHS WEAKNESSES
Solid market positions in its relevant Shareholders have not benefitted from markets dividend payments since FY2007; 2017e: Strong financial profile with high cash EUR 0.16 flow orientation EBIT-margin level currently behind peer- FIS covers the entire value chain for group average sensor technology
OPPORTUNITIES THREATS
Five pillar strategy argue for a higher Fast technological change could lead to margin level growing investment needs Offering sensor systems in line with Hiring of skilled employees could become megatrends like e.g. autonomous driving, more challenging miniaturization of medical equipment, Industry 4.0 Increase the sales portion of sensor system solutions with higher value added
Source: equinet Research
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Valuation We value the First Sensor shares and derive the target price from our DCF-model. We have built a base case scenario and in addition a more optimistic view can be seen in a bull case scenario.
DCF valuation To calculate the equity value for First Sensor we use our three-stage DCF-model to determine future cash flows. In our first stage, we calculate a detailed P&L, Balance Sheet and Cash Flow statement for the period up to 2022e based on information provided by the company and our own market assessment. In stage two, we switch over to a trend analysis until 2027e for some key drivers like for example sales growth, EBIT-margin and investments. In the third stage, we analyze and calculate the terminal value on the basis of a going-concern assumption. In addition to the listed base input factors, currently we use a terminal growth rate of 2.5% and a sustainable EBIT-margin of 9.5%.
Exhibit 11: First Sensor: DCF model – Base Case
Phase I Phase II Phase III EUR m 2018e 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e
Revenues 157.0 168.0 180.8 194.9 210.0 224.4 237.9 250.1 260.7 269.5 growth rate 6.4% 7.0% 7.6% 7.8% 7.7% 6.9% 6.0% 5.1% 4.2% 3.4% EBIT 12.4 13.5 15.6 17.8 19.8 21.2 22.5 23.7 24.7 25.6 EBIT margin 7.9% 8.0% 8.6% 9.1% 9.4% 9.5% 9.5% 9.5% 9.5% 9.5% Tax -3.7 -4.1 -4.7 -5.3 -5.9 -6.4 -6.8 -7.1 -7.4 -7.7 Tax rate 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% Depr. & Amort. 10.2 9.8 9.9 10.2 10.3 11.2 11.9 12.5 13.1 13.6 % of sales 6.5% 5.8% 5.5% 5.2% 4.9% 5.0% 5.0% 5.0% 5.0% 5.0% Capex -10.5 -10.0 -10.2 -11.0 -11.1 -11.9 -12.6 -13.2 -13.8 -14.2 % of sales 6.7% 6.0% 5.6% 5.6% 5.3% 5.3% 5.3% 5.3% 5.3% 5.3% Change in WC & P -0.7 -0.5 -0.4 -0.1 0.2 0.2 0.2 0.2 0.2 0.1 % of sales 0.4% 0.3% 0.2% 0.1% -0.1% -0.1% -0.1% -0.1% -0.1% -0.1% Free Cash Flow 7.7 8.8 10.2 11.5 13.3 14.4 15.3 16.1 16.8 17.4 400.3 growth rate nm 13.7% 16.9% 12.3% 15.9% 7.9% 6.5% 5.3% 4.3% 3.4% 2.5% Present Value FCF 7.4 7.9 8.6 9.0 9.8 9.9 9.8 9.7 9.4 9.1 209.7
PV Phase I 42.6 Risk free rate 3.5% Targ. equity ratio 60% PV Phase II 47.8 Premium Equity 5.0% Beta 1.1 PV Phase III 209.7 Premium Debt 2.0% WACC 7.0%
Enterprise value 300.1 Sensitivity Growth in phase III - Net Debt (Cash) 22.8 1.5% 2.0% 2.5% 3.0% 3.5% - Pension Provisions 0.3 6.26% 27.0 29.5 32.7 36.8 42.4 - Minorities & Peripherals 1.2 6.60% 24.9 27.0 29.6 32.9 37.3 + MV of financial assets WACC 6.95% 23.1 24.8 27.0 29.7 33.2 - Paid-out dividends for last FY 0.0 7.30% 21.4 23.0 24.8 27.0 29.9 +/- Other EV items 7.65% 20.0 21.3 22.9 24.7 27.1
Equity value 275.8 Number of shares 10.2 Value per share (€) 27.0 Current Price (€) 23.9 Upside 13%
Source: equinet Research The major trigger for a further margin improvement is First Sensor’s five-pillar strategy in our view. The first fruits were already harvested in FY2017, when the EBIT-margin increased further to 7.2% from 6.6% a year earlier. The last capital markets day in March
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2018 provided a lot of details, how the mid-term EBIT-margin level of ~10% can be reached. On this basis, we calculate for the company an enterprise value of EUR 300.1m. Including financial debt, pensions and other items we calculate the equity value at EUR 275.8m or EUR 27.0 per share. This is clearly higher than the current share price level and we initiate our coverage with an Accumulate rating. In our bull case scenario we have changed a few parameters. The terminal growth rate was increased to 3.5% and the sustainable margin was lifted to 10%, which is the group’s mid- term target. Other input factors like the equity ratio, beta factor, risk free rate etc. have been left unchanged.
Exhibit 12: First Sensor: DCF model – Bull Case
Phase I Phase II Phase III EUR m 2018e 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e
Revenues 157.0 168.0 181.4 196.0 211.6 227.0 241.7 255.6 268.4 279.8 growth rate 6.4% 7.0% 8.0% 8.0% 8.0% 7.3% 6.5% 5.8% 5.0% 4.3% EBIT 12.4 13.5 15.6 16.7 19.0 20.9 22.7 24.5 26.3 28.0 EBIT margin 7.9% 8.0% 8.6% 8.5% 9.0% 9.2% 9.4% 9.6% 9.8% 10.0% Tax -3.7 -4.1 -4.7 -5.0 -5.7 -6.3 -6.8 -7.4 -7.9 -8.4 Tax rate 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% Depr. & Amort. 10.2 9.8 9.9 10.2 10.3 11.2 12.0 12.7 13.4 14.0 % of sales 6.5% 5.8% 5.5% 5.2% 4.9% 4.9% 5.0% 5.0% 5.0% 5.0% Capex -10.5 -10.0 -10.2 -11.0 -11.1 -11.9 -12.7 -13.4 -14.1 -14.7 % of sales 6.7% 6.0% 5.6% 5.6% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% Change in WC & P -0.7 -0.5 -0.4 -0.1 0.2 0.2 0.2 0.2 0.2 0.2 % of sales 0.4% 0.3% 0.2% 0.1% -0.1% -0.1% -0.1% -0.1% -0.1% -0.1% Free Cash Flow 7.7 8.8 10.2 10.7 12.8 14.1 15.5 16.7 17.9 19.1 573.7 growth rate nm 13.7% 16.9% 4.8% 19.1% 10.7% 9.3% 8.2% 7.2% 6.4% 3.5% Present Value FCF 7.4 7.9 8.6 8.4 9.4 9.7 9.9 10.0 10.0 10.0 300.5
PV Phase I 41.6 Risk free rate 3.5% Targ. equity ratio 60% PV Phase II 49.6 Premium Equity 5.0% Beta 1.1 PV Phase III 300.5 Premium Debt 2.0% WACC 6.9%
Enterprise value 391.7 Sensitivity Growth in phase III - Net Debt (Cash) 22.8 2.5% 3.0% 3.5% 4.0% 4.5% - Pension Provisions 0.3 6.25% 35.4 39.9 46.2 55.1 69.2 - Minorities & Peripherals 1.2 6.59% 32.0 35.7 40.5 47.2 57.1 + MV of financial assets WACC 6.94% 29.2 32.1 36.0 41.2 48.5 - Paid-out dividends for last FY 0.0 7.29% 26.7 29.2 32.3 36.4 42.0 +/- Other EV items 7.63% 24.6 26.7 29.3 32.6 36.9
Equity value 367.4 Number of shares 10.2 Value per share (€) 36.0 Current Price (€) 23.9 Upside 50%
Source: equinet Research
The result is a value per share of EUR 36.0, and this gives currently an upside potential of 47%. When the company will reach or beat their own growth and margin targets the shares will have a further significant upside potential in our view.
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Peer group analysis The overall sensor market is fragmented and there are both non-listed and listed companies being active players. We have selected listed companies only. Our ten international companies generally are all active in the global sensor market, but in detail business activities, core competences or serving end-markets vary. Not all selected peer group companies are competitors in all of First Sensor’s defined three target markets.
Exhibit 13: First Sensor: Peer-group comparison
Company PE PE EV/EBIT EV/EBIT EV/EBITDA EV/EBITDA 2018e 2019e 2018e 2019e 2018e 2019e
ams AG 24.1 13.0 24.5 12.2 16.4 9.0 Detection Technology Oy 17.1 15.0 12.0 10.6 10.6 9.5 ELMOS Semiconductor AG 18.6 16.3 12.0 10.4 7.2 6.4 Hamamatsu Photonics K.K. 36.2 32.9 23.1 20.7 16.0 14.4 Integrated Device Technology, Inc. 17.9 16.0 16.1 14.0 14.9 12.6
JENOPTIK AG 28.3 25.4 22.5 19.9 17.1 15.3 Melexis NV 28.6 25.2 23.4 20.7 19.0 16.9 OSI Systems, Inc. 18.9 17.7 17.0 13.2 8.1 7.5 Sensata Technologies Holding PLC 14.3 13.1 13.2 11.7 11.7 10.5 TE Connectivity Ltd. 17.1 15.8 14.5 13.2 11.4 10.5 Median 18.8 16.1 16.5 13.2 13.3 10.5
First Sensor AG 35.6 31.9 21.4 19.2 11.8 11.2
Source: FactSet, equinet Research First Sensor’s main USPs are, among other factors, the focus on clearly defined strategic target markets with long-term growth perspectives and the fact that FIS covers the entire value chain for sensor technolgy.
Exhibit 14: First Sensor: Peer-group comparison
30 Hamamatsu Photonics ams AG 25 Melexis First Sensor Jenoptik 20 OSI Systems TE Connectivity Integrated 15 Device Technology Elmos Sensata 10 Semiconductor Detection Technologies
Technology EV/EBIT 2018e 5
0 0% 5% 10% 15% 20% 25% 30% 35%
EBIT-Margin 2018e
Source: FactSet, equinet Research Exhibit 14 shows that currently First Sensor’s EBIT-margin level ranks somewhat behind the peer group, but the EV/EBIT multiple is comparably high (more detailed margin analysis in paragraph “Financials”). FIS covers the chip production, packaging technology and
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distribution of sensor products which vary in their margin level. That has to be taken into account, when comparing the margins with the other players.
Profile of peer-group companies ams AG ams AG develops and manufactures analog semiconductors, sensors and related solutions for customers in consumer, industrial, medical, mobile communication and automotive end markets. In FY 2017 the company achieved sales of about EUR 1,064m and an operating income of EUR 169m (margin of 16%) while employing 7,016 people. The company’s core business areas are Optical sensing, Imaging and Audio and Environmental Sensing. ams AG is somewhat diversified geographically, with the bulk of revenues coming from Asia (47%), as well as smaller contributions from EMEA (33%) and the Americas (20%). ams AG published its Q1 2018 results on the 24th of April with a profit warning for Q2 2018e.
Detection Technology Finish Detection Technology was founded in 1991 and engages in the design and manufacture of X-ray imaging components and systems. Products include photodiodes, detectors and many more. In FY 2017 the company achieved net sales of about EUR 89m and an operating income of EUR 19.9m (margin of 22.3%). The company currently employs 405 people. The company’s segments are Security and Industrial Business Unit (SBU, sales share of 65%) and Medical Business Unit (MBU, 35%). Detection Technology shows little geographic diversification, with a bulk of revenues coming from Asia (63%), as well as smaller contributions from Europe (12%) and the Americas (25%).
ELMOS Semiconductor AG ELMOS Semiconductor is a manufacturer of semiconductor based system solutions headquartered in Dortmund, Germany. In its Semiconductor segment the company offers solutions with applications in household appliances, digital cameras, building technology and machine control systems. The Micromechanics segment provides micro-mechanical technologies in bulk and thin film engineering used in sensors. Most of the products were shipped into automotive end markets. In FY 2017 ELMOS Semiconductor achieved sales of about EUR 250.4m and an EBIT of EUR 38.4m (margin of 15.3%).
Hamamatsu Photonics K.K. Japanese Hamamatsu Photonics is a producer of imaging and analyzing systems, photomultiplier tubes, imaging devices and various other products. The company’s segments are Electron Tube (sales share of 53%), Opto-semiconductors (28%), Imaging and Measurement Instruments (12%) and others being responsible for the remainder. On April 20 2018, the company pushed up its guidance number for 2018 significantly and has raised its operating profit guidance to Yen 14,900m from Yen 11,600m, reflecting the favorable business performance.
Integrated Device Technology Inc. Integrated Device Technology, Inc. was founded 1980 and today develops system-level solutions that optimize its customers’ applications. The company products in RF, high performance timing, memory interface, real-time interconnect, optical interconnect, wireless power, and smart sensors. These products are among the company’s braod array of complete mixed-signal solutions for communication, computing, consumer, automotive and industrial end-markets. The San Jose based company achieved sales of USD 728.2m and an operating income of USD 110m (15% margin) in 2017. Besides their traditional business
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areas, Integrated Device Technology also engages in Cloud concepts and cloudification of infrastructure.
Jenoptik AG German-based Jenoptik AG is a globally operating technology company. In their Optics & Life Science segment the company is one of the global development and production partners for optical and micro optical systems and components. The Mobility segment engages in the production of measurement technology and laser machines while the Defense & Civil Systems segment develops, manufactures and markets mechatronic and sensor products for civil and military markets. Jenoptik AG published sales of EUR 748m and an EBIT of EUR 78m in 2017. The majority of revenues are generated in Europe (58%), the rest attributable to the Americas (23%) and Asia (15%). The biggest single shareholder is Thüringer Industriebeteiligungs GmbH & Co. KG with a stake of 11%, according to Jenoptik AG.
Melexis NV The foundation of Melexis dates back to 1988, when the Belgian company was founded by Roland Duchatelet. Its main target market is the automotive industry where it supplies integrated semiconductor devices. Its portfolio comprises sensors, actuators, radiofrequency circuits and micro-optical circuits. Based on reported figures, 2017 the group achieved sales of EUR 511.6m and an EBIT of EUR 132.6m resulting in a margin of 26%. On April 20 Melexis reported Q1 2018 results, indicating a sales growth of 13% yoy. Melexis has announced to invest EUR 75m over a period of 5 years into new production facilities in Bulgaria and expects to grow the workforce from 425 to 575 in 2018.
OSI Systems Inc. OSI Systems is an integrated designer and manufacturer of specialized electronic systems and components for critical applications. The firm sells its products and services in diversified markets including homeland security, healthcare, defense and aerospace. The company was founded by Deepak Chopra in 1987 and is headquartered in Hawthorne, USA. The security segment generated USD 550m in sales while Healthcare accounted for USD 200m and Optoelectronics for USD 206m. Total income from operations amounted to USD 33.2m in FY 2017. Because of its recent success, OSI Systems announced its intention to buy back 1m shares in March 2018.
Sensata Technologies Holding plc Sensata Technologies has a long-lasting track record in sensing technology. Today the company engages in designing, customizing and manufacturing of mission-critical sensors and controls. With its products it serves a large variety of end-markets, among them for example Aerospace & Defense, Marine, Agriculture or Material Handling. Being closer to First Sensor Sensata is also active in Automotive, Medical and other than already mentioned Industrial markets. Revenues in the first quarter increased by 9.8% to USD 886.3m, while net profit was up by 26.1% and amounted to USD 90.5m.
TE Connectivity Ltd. Founded in 2000, Swiss TE Connectivity is a producer of connectivity and sensor solutions. Products range from data and energy cables to high-end sensors and relays. Sales of USD 13,113m distribute to the segments Transportation solutions (53%), Industrial solution (27%) and Communication solutions (20%). Income from continuing operations consequently amounts to USD 1,673m.
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Company Profile
Company overview In 1991 the company was established as Silicon Sensor GmbH by former employees from VEB Werk für Fernsehelektronik (in the former German Democratic Republic). As Silicon Sensor International AG the company went public in 1999. Sales at that time amounted to EUR 2.97m. In 2011 the company’s name was changed into First Sensor AG and in the same year the Sensortechnics group was acquired. The strategic rationale behind this important acquisition was a substantial enlargement of the product offering. Today, First Sensor group comprises the holding company and ten daughter companies with nine production and development locations as well as further six sales companies. The group offers a wide variety of products from sensors to sensor modules and complex sensor systems solutions. With this range of products and solutions the group focusses on the three target markets Industrial, Medical and Mobility. The group serves nearly 3,000 customers with some 5,000 products. First Sensor, so far, achieved a substantial growth. Sales CAGR 2007 – 2017 including acquisitions reached 14.8%, while the reported EBIT grew by 4.8% with a significant recovery being visible in the last two years. 2017 the group reached an EBIT-margin of 7.2%. CAGR for the operating cash flow amounted to 13.1%. With an equity ratio between 45% and 50% and a net debt/EBITDA ratio of 1.3 (FY 2017) the group has a solid financial profile in our view. Mid-term the group wants to achieve an EBIT-margin of ~10%, which is ambitious but not out of reach. Currently the company has a free float of nearly 61%.
First Sensor’s strategy for further growth Target of profitable growth should be reached by a five pillar strategy First Sensor business will benefit from some global megatrends Achieving a sustainable EBIT-margin of ~10%
The overall target of the group is to achieve a continuing profitable growth, which is a common goal for an economically acting company and hence is not unique to First Sensor. After several years of a lower level of profitability since 2016 a recovery of the EBIT-margin has become visible and according to our assessment there is still room for a further margin increase. In the technology driven sensor technology market First Sensor group is focussing on standard products and on customer-specific solutions. The solutions business, under normal circumstances, offers a higher margin potential. First Sensor sees its core competences in particular in: the designing and manufacturing of silicon-based sensor chips and the layout and connection technology (LCT), on the basis of which chips become sensors and sensor systems.
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Exhibit 15: First Sensor: Strategic perspective for profitable growth
Source: First Sensor AG
Target markets The current management has implemented a strategy based on five key pillars in order to achieve further top line growth and to further lift profitability. The first pillar focusses on clearly identified strategic target markets in order to avoid a stuck-in-the-middle position. These markets are Industrial, Medical and Mobility. First Sensor does not address the consumer segment. In all three markets First Sensor and other players can benefit from some long-lasting megatrends. In the Industrial target market „Industry 4.0“ has started to change industrial production fundamentally. Machines and other equipment will be able to communicate with each other, generate and analyse data on a real-time basis, and by doing this can optimize production processes, save costs and increase flexibility towards „batch size one“. In all of these applications e.g. cameras, sensors and software is necessary. First Sensor mainly serves applications like light, radiation, pressure, flow, level and acceleration. Concrete examples are predictive maintenance for industrial equipment, use of cobots (collaborative robots) autonomous transport solutions, scanner technology and many others. This market segment is a multi-billion Euro market with double-digit growth rates are being possible. The target market Medical is also faced with some fundamental changes towards the so- called „E-health“-applications. Among other megatrends the aging population, miniaturization of medical technology and an intensified self-tracking of patients are important drivers for future growth. In this context sensors are needed for measure, control, analyse and communicate, all directed for the improvement of the patient’s health. Also in the third target market Mobility some fundamental changes argue for further growth. E-mobility, autonomous driving and digitalization have already started to penetrate automotive markets. In this context LiDAR-systems (Light detection and ranging) are of particular importance. This specific market is expected to grow by 25% to 35% until 2022 according to our own assessment. First Sensor with its product families targets not only passenger cars but also trucks and commercial and specialized vehicles. All big OEMs are investing in these new technologies and the company already is in a promising position to participate from these trends in our view.
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Key customers and Products The second pillar is to focus more on key customers and key products. The goal is to improve the economies of scale. Key products are those products which have a sales potential of more than EUR 1m per year, while key customers also those with sales of more than EUR 1m per year. The company does not provide any concrete numbers, but according to our own assessment it is our best estimate that today the group has some 20 to 25 key customers which meant that they generate at least some 20% to 25% of the total sales. The platform based products normally are standard products with limited volumes produced. The tailor made sensor systems solution products normally are produced in larger quantities per product and offer higher margins due to more content of intellectual property. Larger quantities in addition can increase the purchasing power of First Sensor and so far can support a margin improvement.
Forward Integration The third pillar is forward integration. First Sensor has addressed a clear product roadmap for the areas light, level, pressure, radiation, flow and acceleration. Along the value added chain, from the chip via component and sensor to sensor systems the sales portion of the latter product group should increase. These tailor-made, more complex solutions contain more FIS know-how and with regard to pricing could offer higher margins. Concrete breakdown figures are not made public by the company but in our view and compared to other initiatives offer an above average upside potential to profitability.
Internationalization The fourth pillar of internationalization is an important element in our view with regard to future growth markets. Regional sales already became more balanced during the last years
Exhibit 16: First Sensor: Sales by region average 2016 and 2017
Asia Rest of the World 10% 0% North America 10%
DACH region
50%
Other Europe 30%
Source: First Sensor AG
Looking back to 2006, Germany account for 65% of sales, while last fiscal year it was 43%. But as Exhibit 16 shows, Europe with some 80% is still the dominant end-market for First Sensor. Production facilities and the product value added are mainly located in Europe. In order to better meet the needs of international customers both the USA and China are markets with significant future growth. In the USA First Sensor already has improved it’s
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position. Sales jumped from EUR 4.4m in 2014 to EUR 17.3m in 2017 (CAGR of 58%). Progress is also visible in Asia, but the CAGR 2014 to 2017 of +8.9% was clearly lower. In particular these two region offer significant growth potential and this is reflected in the partly modified sales organization. A new distribution arm for the region „Overseas“ has been implemented, covering the North America, Asia and the Rest of the World.
Operational Excellence Finally the management pays attention to the operational excellence as being a cross- sectional function. The company already started some projects in 2016 like for example improving lead times and quality, optimization and consolidation of the product portfolio or the one ERP system. Portfolio consolidation, among others, strives for a more optimized product portfolio with a higher share of „A“-products for „A“-customers.
Segment Industrial First Sensor is organized and works as an integrated industrial group. The three target markets Industrial, Medical and Mobility are not the basis for the company’s management approach and internal reporting. Results of the parent company and its subsidiaries do not meet the criteria for a segment report. As a result, only sales figures but no earnings breakdown is provided. The segment Industrial is the biggest segment within the group and generated a stable sales portion of nearly 50% during the last years. With its sensor products and system solutions First Sensor concentrated on the following main areas of: Length measurement (e.g. laser scanners, LiDAR systems) Radiation and Security (e.g. freight inspection at air and sea ports, scanners) Smart Buildings (e.g. climate control, energy distribution, condition monitoring) Industrial Process Control (e.g. level sensing, leak detection) Aerospace (e.g. control and navigation applications, acceleration). In this segment several thousands of customers were served according to our assumption and the main competitors are in our view Hamamatsu, Honeywell, Amphenol Advanced Sensors or Detection Technology.
Exhibit 17: First Sensor: Segment Industrial
EUR m 2013 2014 2015 2016 2017 2018e 2019e 2020e 2021e 2022e CAGR 13-17 CAGR 18e-22e
Sales 68.3 68.4 74.1 72.5 75.1 79.0 83.5 89.0 95.0 101.0 2.4% 6.3% yoy % 0.2% 8.3% -2.2% 3.6% 5.2% 5.7% 6.6% 6.7% 6.3% share of group sales 62.9% 55.2% 53.8% 48.3% 50.9% 50.3% 49.7% 49.2% 48.7% 48.1%
Source: First Sensor AG, equinet Research Last fiscal year the segment´s sales increased by 3.6% yoy following a decline a year earlier. As published by the company sales with Industry 4.0 applications in 2017 amounted to EUR 32.7m or 43.5% of segment sales. Given this volume, the sub-segment last year was the most important activity in the overall Industrial end-market. Looking forward First Sensor can benefit from some megatrends, in particular from „Industry 4.0“, and in general from ongoing factory- and process automation. This year the segment will benefit in
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Germany and Europe from the favourable economy. Based on a solid order backlog we expect for the upcoming year’s and accelerated sales growth between 5% and 6.7%. Profitability is expected to increase in our view due to an improved product mix towards the sale of more system solutions. Furthermore we expect better economies of scale from serving a higher portion of larger customers with higher unit volumes.
Segment Medical The Medical segment with a sales share of close to 20% currently is the smallest activity within the group. Due to its highly sophisticated products the segment could achieve an above average margin level in our view. In Medical First Sensor concentrated mainly on the following areas: Breathing and Respiration (e.g. thermal mass flow sensors, sensors for anesthetic devices) Dialysis (e.g. silicon pressure sensors, multi-sensor modules including valves, pumps etc.) Diagnostics (e.g. large-scale X-ray detector arrays for CT, video endoscopy). One of the main customer groups are producers of medical technology like e.g. Siemens or Drägerwerke. Competitors are, among others, Hammamatsu Photonics from Japan, Excelitas , Sensirion or ams AG. Other non-listed sensor companies serving the Medical end-market are for example Amsys GmbH & Co. KG, Framos GmbH, Hottinger Baldwin Messtechnik GmbH (all Germany) or Sencio B.V. from the Netherlands. Currently not all are direct competitors for FIS.
Exhibit 18: First Sensor: Segment Medical
EUR m 2013 2014 2015 2016 2017 2018e 2019e 2020e 2021e 2022e CAGR 13-17 CAGR 18e-22e
Sales 17.7 20.4 23.8 30.7 27.9 30.0 32.5 35.3 38.4 41.7 12.1% 8.6% yoy % 15.4% 16.7% 29.0% -9.0% 7.4% 8.3% 8.6% 8.8% 8.6% share of group sales 16.3% 16.5% 17.3% 20.5% 18.9% 19.1% 19.3% 19.5% 19.7% 19.9%
Source: First Sensor AG, equinet Research As the quarterly reporting shows, there is no particular seasonality during the fiscal year. Following three years of strong sales growth in 2017 the segment reported a decline of 9% yoy to EUR 27.9m. Some important projects were postponed and could not be compensated. Therefore we would expect a promising start into the year and expect that the segment will return to the growth path again with a plus of 7.4% for FY 2018e. Mid- to long-term new „E-health“-applications and a further miniaturization will drive further growth. More sophisticated solutions in medical technology will not only measure, but also analyse results and communicate with other equipment. This trend could also become beneficial for First Sensor in our view. On the other hand, in particular in Germany, a general cost pressure in the health care system is visible and could also affect the profitability of suppliers like First Sensor
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Segment Mobility The mobility segment in 2017 accounted for 30.1% of group sales. Looking back to FY2013 the sales share with 20.8% was significant lower. Analysing the quarterly sales figures, there is no particular seasonality visible in our view. In Mobility First Sensor concentrated on the following main areas: Advanced driver assistance systems (camera solutions, LiDAR-systems for autonomous driving) OEM pressure sensors (passenger cars, trucks, busses, industrial and specialized vehicles). Camera solution can be used for example for turn assist, cross traffic assist, smart rear driving or as a mirror replacement rear solution. Furthermore the OEM pressure sensors can be used for tank pressure, air flow meters, electrical brake systems, in diesel particulate filters or for diesel exhaust fluid measurement. First Sensor’s customers are mainly OEMs, large automotive suppliers and retrofitters. Competitors in this area are for example ams AG, Melexis, Bosch or Sensata Technologies.
Exhibit 19: First Sensor: Segment Mobility
EUR m 2013 2014 2015 2016 2017 2018e 2019e 2020e 2021e 2022e CAGR 13-17 CAGR 18e-22e
Sales 22.6 35.2 39.8 46.9 44.5 48.0 52.0 56.5 61.5 67.3 18.5% 8.8% yoy % 55.9% 13.1% 17.8% -5.2% 8.0% 8.3% 8.7% 8.8% 9.4% share of group sales 20.8% 28.4% 28.9% 31.2% 30.1% 30.6% 31.0% 31.3% 31.6% 32.0%
Source: First Sensor AG, equinet Research
Automotive markets worldwide currently are faced with some fundamental changes: E-mobility Autonomous driving Digitalization. First Sensor in particular with cameras and sensor solutions can benefit from autonomous driving. Based on a market forecast from Yole Développment from February 2018 the potential from autonomous driving for sensors and sensor systems is really large over the next fifteen years. First Sensor will concentrate itself on the areas LiDAR and cameras, both being attractive sub-segments. With regard to sales currently the LiDAR product range is in an early testing phase and therefore not material. In the Industrial segment it is more material, but currently also on a low level.
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Exhibit 20: First Sensor:
Source: Yole
Autonomous driving will become accepted over time by reaching various levels. Today certain assistance systems as for example adaptive cruise control (ACC) will help to operate the vehicle. The driver is active and drives the car. A next step can be a highly automated car that controls functions and the driver takes control only if necessary. Finally any human intervention by a driver is not required. With the introduction in 2017 of the „Blue Next“ new camera generation based on a modular platform First Sensor today is well positioned in our view. Based on purely organic growth for the current year we estimate a sales growth of 8% yoy. Based on our scenario described above we see good chances that First Sensor can keep this pace of sales growth.
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Market Environment
World Output 2017 with +3.8% yoy better than expected Further growth expected in 2018e and 2019e Long-term outlook with increasing risks
Thanks to its dynamic second half 2017 the World Output came out better than expected. The IMF in its latest World Economic outlook revised the figure for 2017 to +3.8% yoy from +3.5% yoy estimated in July 2017. The IMF stated that the global economy gained speed, in particular in some emerging countries. Looking forward to 2018e the IMF became more optimistic and increased the estimate to +3.9% yoy from +3.6% yoy. For Germany the IMF increased the forecast to +2.5% yoy from +1.8% (from October 2017). This is relevant for First Sensor, because some 50% of the group sales are generated in the DACH-region. Including other European countries the sales share is close to 80%. The IMF has also increased significantly the forecast for the USA for 2018e to +2.9% yoy versus +2.3% from October last year. First Sensor already 2017 achieved a substantial sales growth in North America of 45% and so far the framework conditions argue for further growth. China will continue to grow, but on a slightly lower level. The countries output 2018e is expected to reach +6.6% yoy, following a +6.9% yoy for 2017.
Exhibit 21: Long-term World GDP development Exhibit 22: IMF optimistic for 2018
6.0 4.0 5.0 3.5 4.0 3.0
% 3.0 2.0
1.0 2.5 0.0
-1.0 2.0
2008 2002 2003 2004 2005 2006 2007 2009 2010 2011 2012 2013 2014 2015 2016 2017
2001 April 2017 July 2017 April 2018
2019e 2018e IMF : World Output, Real GDP, % yoy 2016 2017 2018e 2019e
Source: IMF – World Economic Outlook, April 2018 Source: IMF – World Economic Outlook, April 2018
For the first time the IMF presented the forecast figure for 2019e which is +3.9% yoy (see Exhibit 22). Comments from the IMF argue for a peak scenario in our view. Long-term the organisation have identified growing risks which are in particular a „tightening of financial conditions“ (faster than expected interest hikes), a potential trade war and more protectionism around the globe and geopolitical risks. The April figure for the German Ifo climate index declined to 102.1 index points. It is the fifth month in a row with declining figures. Both components of the index, the current situation and the expectations, are down in April. Expectations are also down the fifth months in a row. It is our impression the German economy is slowing down but currently far away from a recession.
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Sensor market overview Underpinned by technical improvements of electronic devices, the global sensor market has experienced substantial growth over the last decades. Increased relevance of sensors throughout diverse industries can be tracked by overall advancement in technology (Exhibit 1.). From application of mainly in automotive sector, demand for MEMS and sensors has been uplifted by introduction of smartphones, drones, and other appliances in 2000’s. The current developments in Augmented Reality (AR), Virtual Reality (VR), robotics, and other applications have further manifested the relevance of sensors for technological development. As a result the market has achieved global revenues of c. EUR 118bn in 2017 and is expected to grow by a CAGR of 10.6% to EUR 195.6bn in 2022.
Exhibit 23: Long-term perspectives for sensors Exhibit 24: Global sensor market development
Technology / 2nd Wave Performance 250 Smartphones bring a lot of new functionalities and mobility, which ramps up 200 the demand for MEMS and sensors 150 1st Wave
Sensors are not used in 3rd Wave consumer, Automotive is bn EUR 100 the main application. AR/VR, robotics, autonomous cars propel demand for MEMS and 50 sensors.
Time 0 2016 2017 2018e 2019e 2020e 2021e 2022e 1980 20 years 2000 15 years 2015 10 years 2025 5 years 2030
Source: Yole Développement 2017 Source: AMR 2017, BCC 2018, R&M 2017, equinet Research The demand-driven growth of the global sensor market has been augmented by advancements in sensor-technology. Especially miniaturization and improved communication capabilities of sensors enabled its wider adoption in electronics devices. The growing demand for wearables as well as spread of the Internet of Things (IoT), along with an continuing automation of production processes (Industry 4.0), have been the key drivers for the global sensor market. The main restraints for the market relate to the impact of incorporating sensor in a device. These include reduced life-span of the device and higher energy consumption (Allied Market, 2016). Hence, it is not surprising that sensor manufacturers invest heavily in R&D and have increased their spending by 18% in 2017 (with expected 13% increase in 2018), according to Association for Sensors and Measurement (AMA, 2017). The highly fragmented and rather transparent sensor market results in a strong bargaining power of the buyer-side, which is in a position to put the pricing of sensors under pressure. According to a research house IC Insight (2018), the average price for sensors is expected to decline by c. 2.5% per annum through 2022. The adverse market conditions are expected to reflect negatively on the industry’s profits and set the sector under consolidation pressure (EPS, 2016). Despite the rising demand from consumer electronics, industrial sector is still the largest end-market for sensors (Exhibit 25). The sector includes, among others, sensors for safety and security, smart building, process automation, as well as wearable smart sensors for workers. In 2017 the industrial application sensor market has achieved c. EUR 42.1bn and will, according to our estimates, grow by a CAGR of c.8.5-9.5%. The aerospace sensor market (which is also target market for First Sensor) is driven mainly by wireless sensor segment, which substantially reduce the installation and maintenance costs of an aircraft. The market accounted for c. EUR 1.5bn in 2017 and is projected to grow by a CAGR of 6.0% over the next 5 years (M&M, 2017).
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Exhibit 25: Sensor market by applications in 2016 Exhibit 26:Industrial sensor market development
6% 70 5% 37% Industrial 60 8% Automotive 50 40 Consumer 30 Medical bn EUR 20 21% Aerospace, etc. 10 Other 0 21% 2016 2017 2018e 2019e 2020e 2021e 2022e
Source: Merger Alliance 2015, equinet Research Source: equinet Research A wider adoption of self-handling devices for patient care is seen as a possible countermeasure to the increasing healthcare costs and insufficient resources for stationary care. Such devices as inhalers, insulin pens and smart syringes allow for dosing of medicine, as well as record and control of health status remotely. The current 58m of sensors in medical applications are projected to increase to over 320m by 2022, due to advancement in sensitivity, accuracy and reliability of medical devices, and sensors in particular (Yole Développement 2017). Driven by the increasing demand for medical sensors in the therapeutic and the diagnostic sectors, the market is expected to grow by a CAGR of 16.0% from EUR 9.5bn in 2017 to 20.0bn in 2022. Similarly, the automotive sector has been increasing adoption of sensors to improve vehicle performance, along with significant enhancement of safety, and emission reduction. As of now, a single automobile is equipped with 60-100 sensors (Nester 2018) in powertrain, body, and safety applications. Technologies, such as advanced driver assistance (ADA) and lane departure warning (LDW) systems, are creating new growth opportunities for the automotive sensor market. Similarly, rising vehicle electrification and improving government safety and gas consumption standards are likely to stimulate the market growth globally and increase the number of sensors in a single vehicle to 200. In a longer term, development and introduction of driverless cars will propel the market of automotive sensors, especially with respect to LiDAR technology. In total, the market is estimated to register a CAGR of 10.3% and to grow from EUR 25.9bn in 2017 to EUR 42.3bn in 2022.
Exhibit 27: Medical sensor market development Exhibit 28: Automotive sensor market development
25 45 40 20 35 30 15 25 20
EUR bn EUR 10 EUR bn EUR 15 5 10 5 0 0 2016 2017 2018e 2019e 2020e 2021e 2022e 2016 2017 2018e 2019e 2020e 2021e 2022e
Source: Yole Développement 2017, equinet Research Source: Statista 2018, equinet Research
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The sensor markets considered above encompass a wide range of technologies which are related, but not directly addressed by First Sensor. In order to approximate for the target markets, we focus on the size of the microelectromechanical systems (MEMS) market. These systems integrate mechanical and electrical components and range in size from 20 micrometres to a millimetre. The small size and weight made these devices attractive for many applications. Especially consumer electronics, which is responsible for over 40% of the total MEMS market (Grand View Research 2016), has embraced this technology in such devices as smartphones and tablets. The total MEMS market is estimated to have reached about EUR 9.3bn in 2017 (Yole, 2017) with a CAGR of 11.7% (Technavio 2017) over the next years, to EUR 16.1bn in 2022 (Exhibit 29). Based on the application revenue split of the MEMS market in 2017 (Exhibit 30), Industrial MEMS market was valued at EUR 900m, Medical at EUR 1.3bn, and Automotive at EUR 2.4bn in 2017. The total target market of First Sensor thus amounts to EUR 4.6bn.
Exhibit 29: MEMS market development Exhibit 30: MEMS segmentation 2016
18 7% 16 26% 14 14% Automotive 12 10 Consumer 8 Industrial
EUR bn EUR 10% 6 Medical 4 Other 2 0 2016 2017 2018e 2019e 2020e 2021e 2022e 43%
Source: IHS 2015, equinet Research Source: Grand View Research 2016, equinet Research
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Financials Strategy program a good basis for reaching the 10% EBIT-margin target – we would not rule out a higher level in the long run 2017 FIS outreached its own financial targets 5-6% of sales for R&D Q1 2018 report with confirmation of the full-year guidance FIS a strong cash flow generator
Earnings analysis As already explained, First Sensor is organized and works as an integrated industrial group. Results of the parent company and its subsidiaries do not meet the criteria for a segment reporting. Following the subprime and global financial crisis the profitability of First Sensor (and for so many others) sharply declined and in 2008 and 2009 the group had to report losses. But a strong margin recovery followed immediately in 2010 and the EBIT-margin returned into the positive area at 8.0%. The peak margin so far was achieved in 2007 with 17.9%. Up to now the group has not reached this pre-crisis margin level again. Largely this is explained by a more competitive market framework. It is also reflected by a ten year’s (2007–2017) sales CAGR of 14.8% and a CAGR for the reported EBIT of 4.8%. The new management has set in place a modified strategy and the first fruits already became visible in 2016 and 2017. Also helped by the booming economy the EBIT-margin increased to 6.6% (2016) and made a further step forward to 7.2% in 2017. But compared to our defined peer group there is still a gap to close. The average EBIT-margin 2018e of 18.7% compares to our estimate 2018e for First Sensor of 7.9%.
Exhibit 31: Revenues and EBIT Margin Exhibit 32: Temporary EBIT margin decline in Q1 ‘18
200.0 40.0% 60 15.0% organic growth since 2012 160.0 10.0% 20.0% 40 120.0 5.0% 0.0% EUR m EUR 20
EUR m EUR 80.0 0.0% -20.0% 40.0 0 -5.0%
0.0 -40.0%
Q2 2015 Q2 2016 Q1 Q1 2015 Q1 2015 Q3 2015 Q4 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1
Q3 2018e Q3 Q4 2018e Q4 Revenue EBIT Margin 2018e Q2 Revenues EBIT Margin
Source: First Sensor, equinet Research Source: First Sensor, equinet Research
For 2017 the group outreached its own financial targets. Group sales of EUR 147.5m beat the guided corridor of EUR 140-145m. The reported EBIT-margin of 7.2% came out significant better than the target of 5-6%. Main reasons in our view are a better product mix, better economies of scale and an optimized value added chain. Concerning the EBIT bridge 2017 the main burden factors were higher wages/salaries (plus EUR 1.5m) and negative volume effects from current products (EUR 1.4m), which could largely be offset by positive
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volume and price effects from new projects (EUR 2.1m) and by lower consultancy fees (EUR 1.0m).
Exhibit 33: First Sensor: Key figures
EUR m 2013 2014 2015 2016 2017 2018e 2019e 2020e 2021e 2022e CAGR 13-17 CAGR 18e-22e
Order intake 121.4 139.3 142.3 132.9 163.7 174.3 185.1 195.3 203.5 217.0 7.8% 5.6% Sales 108.5 124.0 137.7 150.1 147.5 157.0 168.0 180.8 194.9 210.0 8.0% 7.5% EBIT reported 2.7 4.1 1.2 10.0 10.6 12.4 13.5 15.6 17.8 19.8 40.6% 12.5%
Operating Cash Flow 10.2 9.8 3.2 16.6 16.0 15.2 17.0 18.8 20.1 21.9 11.7% 9.6% Analysis Book-to-bill-ratio (x) 1.12 1.12 1.03 0.89 1.11 1.11 1.10 1.08 1.04 1.03 EBIT-margin, % 2.5% 3.3% 0.9% 6.6% 7.2% 7.9% 8.0% 8.6% 9.1% 9.4% Oper. CF-margin, % 9.4% 7.9% 2.3% 11.1% 10.8% 9.7% 10.1% 10.4% 10.3% 10.4% Cash conversion (x) * 3.8 2.4 2.7 1.7 1.5 1.2 1.3 1.2 1.1 1.1
Source: First Sensor AG, equinet Research Our forecasts for the First Sensor group are based on purely organic growth. We have outlined above our scenarios for the three defined target markets. The CAGR 2018e-2022e for the EBIT with 12.5% will be much stronger than for sales with 5.6%. As a result the corresponding margin is expected to constantly grow to more than 9%. Our underlying macro scenario for Germany and Europe assumes a normalization of the boom of the last quarters, as for example the latest Ifo climate index for April signals. Since November 2017 the index was down for the fifth time in a row (by numbers from 105.2 to 102.1 in April 2018). During the last years the group spend some 5-6% of sales for R&D projects to secure future growth. 2017 R&D expenses amounted to EUR 8.6m (2016: EUR 8.8m). Overall activities are directed to seeking and testing new measurement methods what is the basis for the development of new sensor chips. Secondly sensors and sensor systems have become smarter and more complex. They must be able to interpret data and to communicate with other systems. End of 2017 the group employs 94 people or 12% of the total employees in R&D, while the group currently holds 39 patents. Looking forward we estimate a stable R&D ratio. Since 2007 the company distributed no dividends to their shareholders but we understand this policy to give investments in future profitable growth a higher priority. For FY 2017e management plans the reopening of dividend payments and made the proposal to the annual shareholder meeting to pay EUR 0.16 per share or in absolute terms EUR 1.6m. We interpret this as a positive sign for the group’s outlook and expect a further increase to EUR 0.18 for FY 2018e.
Q1’ 18 with decreased output due to ERP system introduction Due to ongoing lively demand from end-markets FIS reported a 12% increase in the order intake to EUR 39.3m. In contrast, group sales came out nearly stable and amounted to EUR 34.5m. The fact that sales came out stable “only” is explained by the introduction of a new ERP system and a related decline of the group’s output level, mainly in January. So far it has to put into perspective that the book-to-bill ratio increased to 1.14 (1.02). By end- markets mainly Industrial was affected. This segment reported a sales decline of 8.4% yoy, while the other two segments Medical and Mobility reported higher sales figures. The ERP system introduction effect is visible too at for example a higher inventory level, a partly higher order backlog, lower sales per employee and a lower EBIT-margin level. In a conference call management stated that in February and March production levels were up
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again, and we expect a positive shift both in sales and profit during the course of the year 2018. The full year financial targets for 2018 were confirmed. Group sales should reach a level of EUR 150 – 160m, while our estimate amounted to EUR 157m. On average the next three quarters have to deliver sales of EUR 40m each in order to reach our estimate. According to FIS the EBIT-margin should reach 7% - 9% and we are forecasting 7.9%.
Exhibit 34: FIS Q1 2018 with growing order intake and temporary lower EBIT-margin
EUR m Q1 2018 Q1 2017 % YoY equinet Delta
Order intake 39.3 35.1 12.0% 37.2 5.6%
Revenues 34.5 34.3 0.6% 36.3 -5.0%
of which: Industrial 16.3 17.8 -8.4% 18.8 -13.3% of which: Medical 7.4 6.4 15.6% 6.8 8.8% of which: Mobility 10.8 10.1 6.9% 10.7 0.9%
Book-to-bill ratio group 1.14 1.02 1.02
EBIT 1.1 1.8 -40.2% 2.6 -59.3% EBIT Margin 3.1% 5.2% 7.2%
Net income 0.2 1.2 -83.9% 1.8 -88.9%
EPS, EUR 0.02 0.13 -84.9% 0.17 -88.5%
Source: First Sensor AG, equinet Research
With the Austrian ams AG one of the competitors already reported its Q1 2018 results. Due to the acquisition of Key Lemon from Switzerland both sales (+147% yoy) and operating profit (from USD 5.0m to USD 77.3m) were up significantly. The non-consumer area, which is comparable to First Sensor’s activities, performed positive as expected. Looking forward, the second quarter will be burdened by a temporary weaker business in the consumer segment (lower business for mobile phones), while this effect cannot be transferred to First Sensor.
Financial analysis The overall financial situation of First Sensor is solid in our view and has no significant restrictions with regard to the growth plans. One of the areas of improving the operational excellence is a further optimization of the net working capital. The strong increase in 2011 is related to the takeover of Sensortechnics GmbH from Augusta Technology. This M&A-transaction in general was an important step forward for First Sensor at that time. The move resulted, among other factors, in a new level for the net working capital (NWC). As a one-time effect the NWC 2011 sharply increased to 53%, but immediately normalized in the following year to 31%. Last year the NWC in absolute terms amounted to EUR 37.5m (EUR 35.7m) or 25.4% (23.8%) of sales. On the basis of a more efficient management of inventories and
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receivables we see a good chance that over time NWC/Sales can go down further in the direction of 20%. A further reduction will become more challenging in our view, having in mind large product variety and the need to have full delivery capacities.
Exhibit 35: Net Working Capital will be reduced over time
45.0 60.0% 40.0 35.0 50.0% 30.0 40.0% 25.0
20.0
EUR m EUR 30.0% 15.0 10.0 20.0% 5.0 0.0 10.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e2019e2020e Net working capital (NWC) NWC/Sales (%)
Source: First Sensor AG, equinet Research
Exhibit 36: First Sensor a strong cash flow generator
25.0 20.0 15.0 10.0 5.0
0.0 EUR m EUR -5.0 -10.0 -15.0 -20.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e 2019e 2020e Operating CF Operating FCF
Source: First Sensor AG, equinet Research First Sensor presented itself as a strong cash flow generator. The takeover of Sensortechnics GmbH also had a negative impact on the operating cash flow in 2011. Last year the operating cash flow amounted to EUR 16.0m (EUR 16.6m). Due to a strong increase in investments the operating free cash flow significantly came down to EUR 2.7m (10.0m). First Sensor implemented a new and unique ERP-software, and invested in new production capacities. In 2018e the capex figure will „normalize“ to a level of EUR 10.5m. This is close to our estimate for depreciation of EUR 10.2m. This is also purely organic and does not include any M&A activity. The cash conversion rate (Operating cash flow / EBIT) for the next years is estimated to stay above „1“.
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With regard to the net financial debt our numbers include pension provisions while First Sensor does not include this item. But the effect is negligible, because in 2017 pensions amounted to only EUR 0.3m. During the last years the net financial debt was reduced steadily because financial debt came down and liquidity improved. Last year’s figure of EUR 23.1m (FIS: EUR 22.8m) resulted in a gearing of 22.2%.
Exhibit 37: Net financial debt reduction expected
50.0 40.0%
40.0 30.0%
30.0 20.0%
20.0 10.0%
EUR m EUR 10.0 0.0%
0.0 -10.0%
-10.0 -20.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e2019e2020e Net financial debt Gearing (%)
Source: First Sensor AG, equinet Research
Exhibit 38: Maturity of promissory notes
Placement EUR m Term Due date
2013 12.0 5 years 2018 2015 7.0 5 years 2020
2015 18.0 7 years 2020 2015 3.0 6 years 2022
Total amount 40.0
Source: First Sensor AG
Gross financial debt of EUR 48.3m includes EUR 40.0m of promissory notes. During 2018 the promissory note of EUR 12.0m will become due. A possible refinancing model is not yet communicated. With regard to interest rates First Sensor on average 2017 had to pay 2.6% (2016: 3.5%). We assume that in the current year for Germany we will not see an interest rate hike and so far a refinancing most likely can be made on a low interest rate level again. End of 2017 First Sensor on top has access to unused credit lines in an amount of EUR 11.1m. This volume of debt gives the company enough financial flexibility to finance further growth. From this perspective and given an equity ratio of slightly above 50% it seems that for the time being no further equity cash injection is needed in our view. It can change for example in case of a larger M&A transaction.
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List of abbreviations
ADAS Advanced driver assistance system APD Avalanche photodiode CIS Contact image sensor CMOS Complementary metal-oxide semiconductor DOE Diffractive Optical Element HVAC Heating, ventilation and air conditioning ICT In-circuit testing LiDAR Light detection and ranging MEMS Microelectromechanical system VCSL Vertical-Cavity Surface-Emitting Laser WLO Wafer Level Optics
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First Sensor AG : Summary tables PROFIT & LOSS (EURm) 12/2014 12/2015 12/2016 12/2017 12/2018e 12/2019e Sales 124 138 150 148 157 168 Cost of Sales & Operating Costs -111 -126 -128 -128 -134 -145 Non Recurrent Expenses/Income 0.0 0.0 -2.2 0.0 0.0 0.0 EBITDA 13.1 11.5 19.4 19.6 22.6 23.3 EBITDA (adj.)* 13.1 11.5 21.6 19.6 22.6 23.3 Depreciation -9.0 -10.3 -9.4 -9.1 -10.2 -9.8 EBITA 4.1 1.2 10.0 10.6 12.4 13.5 EBITA (adj)* 4.1 1.2 12.2 10.6 12.4 13.5 Amortisations and Write Downs 0.0 0.0 0.0 0.0 0.0 0.0 of which PPA amortisation 0.0 0.0 0.0 0.0 0.0 0.0 EBIT 4.1 1.2 10.0 10.6 12.4 13.5 EBIT (adj.)* 4.1 1.2 12.2 10.6 12.4 13.5 Net Financial Interest -2.4 -2.4 -1.8 -1.9 -2.1 -2.2 Other Financials 0.0 0.0 0.0 0.0 0.0 0.0 Associates 0.0 0.0 0.5 -1.5 0.0 0.0 Other Non Recurrent Items 0.0 0.0 0.0 0.0 0.0 0.0 Earnings Before Tax (EBT) 1.7 -1.2 8.7 7.2 10.2 11.4 Tax -1.3 -0.4 -2.6 -2.8 -3.1 -3.4 Tax rate 76.3% n.m. 30.2% 38.9% 30.0% 30.0% Discontinued Operations 0.0 0.0 0.0 0.0 0.0 0.0 Minorities -0.2 -0.2 -0.3 -0.2 -0.3 -0.3 Net Profit (reported) 0.2 -1.7 5.7 4.1 6.9 7.7 Net Profit (adj.) 0.2 -1.7 5.8 4.1 6.9 7.7 CASH FLOW (EURm) 12/2014 12/2015 12/2016 12/2017 12/2018e 12/2019e Cash Flow from Operations before change in NWC 11.4 9.5 15.8 17.8 15.8 17.5 Change in Net Working Capital -1.6 -6.3 0.8 -1.8 -0.7 -0.5 Cash Flow from Operations 9.8 3.2 16.6 16.0 15.2 17.0 Capex -5.4 -7.1 -6.6 -13.2 -10.5 -10.0 Net Financial Investments 1.1 2.0 0.1 0.7 0.0 0.0 Free Cash Flow 5.5 -1.9 10.1 3.5 4.7 7.0 Dividends 0.0 0.0 0.0 0.0 -1.6 -1.8 Other (incl. Capital Increase & share buy backs) 0.0 0.0 0.0 0.0 0.0 0.0 Change in Net Debt 5.5 -1.9 10.1 3.5 3.0 5.2 NOPLAT 2.9 0.8 8.5 7.4 8.7 9.5 BALANCE SHEET & OTHER ITEMS (EURm) 12/2014 12/2015 12/2016 12/2017 12/2018e 12/2019e Net Tangible Assets 36.4 35.0 33.0 36.4 37.2 36.9 Net Intangible Assets (incl.Goodwill) 52.2 49.6 49.1 48.9 48.4 48.9 Net Financial Assets & Other 0.0 0.0 0.0 0.0 0.0 0.0 Total Fixed Assets 88.7 84.6 82.1 85.3 85.6 85.8 Inventories 29.9 27.1 25.9 24.6 25.1 25.6 Trade receivables 8.6 17.0 18.4 20.8 21.2 21.4 Other current assets 4.8 4.7 3.8 3.4 3.7 3.8 Cash (-) -14.5 -21.5 -23.8 -25.5 -29.5 -35.0 Total Current Assets 57.8 70.4 71.9 74.3 79.5 85.8 Total Assets 146 155 154 160 165 172 Shareholders Equity 71.6 70.7 76.5 80.8 86.0 91.8 Minority 0.4 0.6 0.9 1.2 1.2 1.2 Total Equity 72.0 71.3 77.4 82.0 87.2 93.0 Long term interest bearing debt 35.3 44.5 37.2 36.3 36.3 35.6 Provisions 0.5 0.7 0.3 0.3 0.3 0.3 Other long term liabilities 13.0 11.8 8.1 7.4 7.5 7.6 Total Long Term Liabilities 48.8 57.0 45.6 44.0 44.1 43.5 Short term interest bearing debt 9.0 10.0 11.0 12.0 13.0 14.0 Trade payables 8.2 7.6 8.6 7.9 8.1 8.3 Other current liabilities 8.5 9.1 11.4 13.7 12.7 12.7 Total Current Liabilities 25.7 26.7 31.0 33.6 33.8 35.0 Total Liabilities and Shareholders' Equity 146 155 154 160 165 172 Net Capital Employed 115 117 110 113 115 116 Net Working Capital 30.3 36.5 35.7 37.5 38.2 38.7 GROWTH & MARGINS 12/2014 12/2015 12/2016 12/2017 12/2018e 12/2019e Sales growth 14.2% 11.1% 9.0% -1.7% 6.4% 7.0% EBITDA (adj.)* growth -16.4% -11.9% 87.3% -9.2% 15.1% 3.3% EBITA (adj.)* growth -43.8% -70.7% 916.7% -13.5% 17.4% 9.2% EBIT (adj)*growth -43.8% -70.7% 916.7% -13.5% 17.4% 9.2%
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First Sensor AG : Summary tables GROWTH & MARGINS 12/2014 12/2015 12/2016 12/2017 12/2018e 12/2019e Net Profit growth -93.5% n.m. n.m. -28.2% 66.3% 11.4% EPS adj. growth -93.6% n.m. n.m. -28.3% 66.3% 11.4% DPS adj. growth n.m. 12.5% 11.1% EBITDA (adj)* margin 10.6% 8.4% 14.4% 13.3% 14.4% 13.9% EBITA (adj)* margin 3.3% 0.9% 8.1% 7.2% 7.9% 8.0% EBIT (adj)* margin 3.3% 0.9% 8.1% 7.2% 7.9% 8.0%
RATIOS 12/2014 12/2015 12/2016 12/2017 12/2018e 12/2019e Net Debt/Equity 0.4 0.5 0.3 0.3 0.2 0.2 Net Debt/EBITDA 2.3 2.9 1.3 1.2 0.9 0.6 Interest cover (EBITDA/Fin.interest) 5.4 4.9 10.8 10.6 10.5 10.8 Capex/D&A 60.2% 68.5% 70.1% 145.4% 102.9% 102.0% Capex/Sales 4.4% 5.1% 4.4% 8.9% 6.7% 6.0% NWC/Sales 24.4% 26.5% 23.8% 25.4% 24.3% 23.0% ROE (average) 0.2% -2.4% 7.8% 5.3% 8.2% 8.6% ROCE (adj.) 2.4% 0.7% 7.2% 6.0% 7.0% 7.6% WACC 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% ROCE (adj.)/WACC 0.3 0.1 1.0 0.9 1.0 1.1
PER SHARE DATA (EUR)*** 12/2014 12/2015 12/2016 12/2017 12/2018e 12/2019e Average diluted number of shares 10.0 10.2 10.2 10.2 10.2 10.2 EPS (reported) 0.02 -0.17 0.56 0.40 0.67 0.75 EPS (adj.) 0.02 -0.17 0.56 0.40 0.67 0.75 BVPS 7.12 6.96 7.49 7.91 8.42 8.99 DPS 0.00 0.00 0.00 0.16 0.18 0.20
VALUATION 12/2014 12/2015 12/2016 12/2017 12/2018e 12/2019e EV/Sales 1.0 1.2 1.2 1.7 1.7 1.5 EV/EBITDA 9.8 13.9 8.9 12.6 11.8 11.2 EV/EBITDA (adj.)* 9.8 13.9 8.0 12.6 11.8 11.2 EV/EBITA 31.3 133.5 17.4 23.4 21.4 19.2 EV/EBITA (adj.)* 31.3 133.5 14.2 23.4 21.4 19.2 EV/EBIT 31.3 n.m. 17.4 23.4 21.4 19.2 EV/EBIT (adj.)* 31.3 n.m. 14.2 23.4 21.4 19.2 P/E (adj.) n.m. n.m. 25.7 n.m. 35.6 31.9 P/BV 1.4 1.8 1.9 2.8 2.8 2.7 Total Yield Ratio 0.0% 0.0% 0.0% 0.7% 0.8% 0.8% EV/CE 1.1 1.3 1.5 2.0 2.1 2.1 OpFCF yield 4.5% -3.1% 6.8% 1.2% 1.9% 2.9% OpFCF/EV 3.4% -2.4% 5.8% 1.1% 1.8% 2.7% Payout ratio 0.0% 0.0% 0.0% 39.6% 26.8% 26.7% Dividend yield (gross) 0.0% 0.0% 0.0% 0.7% 0.8% 0.8%
EV AND MKT CAP (EURm) 12/2014 12/2015 12/2016 12/2017 12/2018e 12/2019e Price** (EUR) 9.75 12.44 14.50 21.76 23.90 23.90 Outstanding number of shares for main stock 10.0 10.2 10.2 10.2 10.2 10.2 Total Market Cap 98 126 148 222 244 244 Net Debt 30 33 24 23 20 15 o/w Cash & Marketable Securities (-) -15 -22 -24 -26 -29 -35 o/w Gross Debt (+) 44 55 48 48 49 50 Other EV components 1 1 1 2 1 1 Enterprise Value (EV adj.) 128 160 174 247 265 260 Source: Company, equinet Bank estimates.
Notes * Where EBITDA (adj.) or EBITA (adj)= EBITDA (or EBITA) -/+ Non Recurrent Expenses/Income and where EBIT (adj)= EBIT-/+ Non Recurrent Expenses/Income - PPA amortisation **Price (in local currency): Fiscal year end price for Historical Years and Current Price for current and forecasted years Sector: Technology Hardware & Equipment/Technology Hardware & Equipment Company Description: First Sensor engages in the development and manufacture of sensors, components and sensor solutions. The company serves the target markets Industrial, Medical and Mobility. The product portfolio include, among others, pressure, optical, radiation, flow, level and inertial sensors, cameras and power semiconductors. The company was founded in 1991 and is located in Berlin, Germany.
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European Coverage of the Members of ESN
Aerospace & Defense M em(*) Bper BAK Kemira OPG Campari BAK
Airbus Se CIC Bpi CBI Kws Saat EQB Coca Cola Hbc Ag IBG
Dassault Aviation CIC Caixabank GVC Lanxess EQB Corbion NIBC
Latecoere CIC Commerzbank EQB Linde EQB Danone CIC
Leonardo BAK Credem BAK Siegfried Holding Ag EQB Ebro Foods GVC
Lisi CIC Credit Agricole Sa CIC Symrise Ag EQB Enervit BAK
M tu Aero Engines EQB Creval BAK Tikkurila OPG Fleury M ichon CIC Electronic & Electrical Ohb Se EQB Deutsche Bank EQB M em(*) Forfarmers NIBC Equipment Rheinmetall EQB Deutsche Pfandbriefbank EQB Euromicron Ag EQB Heineken NIBC
Safran CIC Eurobank IBG Neways Electronics NIBC Hkscan OPG
Thales CIC Intesa Sanpaolo BAK Pkc Group OPG La Doria BAK
Alternative Energy M em(*) Liberbank GVC Rexel CIC Lanson-Bcc CIC
Daldrup & Soehne EQB M ediobanca BAK Vaisala OPG Laurent Perrier CIC
Siemens Gamesa Re GVC M erkur Bank EQB Viscom EQB Ldc CIC
Sif Group NIBC National Bank Of Greece IBG Financial Services M em(*) Lucas Bols NIBC
Solaria GVC Natixis CIC Amundi CIC M assimo Zanetti BAK
Automobiles & Parts M em(*) Nordea OPG Anima BAK Naturex CIC
Bittium Corporation OPG Piraeus Bank IBG Athex Group IBG Olvi OPG
Bmw EQB Poste Italiane BAK Azimut BAK Orsero BAK
Brembo BAK Procredit Holding EQB Banca Farmafactoring BAK Pernod Ricard CIC
Continental EQB Rothschild & Co CIC Banca Generali BAK Raisio OPG
Daimler Ag EQB Societe Generale CIC Banca Ifis BAK Refresco Group NIBC
Elringklinger EQB Ubi Banca BAK Banca Sistema BAK Remy Cointreau CIC
Ferrari BAK Unicredit BAK Bb Biotech EQB Suedzucker EQB
Fiat Chrysler Automobiles BAK Basic Resources M em(*) Bolsas Y M ercados Espanoles Sa GVC Takeaway.Com NIBC
Hella Gmbh & Co. Kgaa EQB Acerinox GVC Capman OPG Telepizza GVC
Indelb BAK Altri CBI Cir BAK Vapiano EQB
Kamux OPG Arcelormittal GVC Comdirect EQB Vidrala GVC
Landi Renzo BAK Corticeira Amorim CBI Corestate Capital Holding S.A. EQB Vilmorin CIC
Leoni EQB Ence GVC Corp. Financiera Alba GVC Viscofan GVC
Nokian Tyres OPG Europac GVC Digital M agics BAK Vranken Pommery M onopole CIC
Norma Group EQB M etka IBG Dobank BAK Wessanen NIBC
Piaggio BAK M etsä Board OPG D ws EQB Food & Drug Retailers M em(*)
Pwo EQB M ytilineos IBG Eq OPG Ahold Delhaize NIBC
Schaeffler EQB Outokumpu OPG Eurazeo CIC Carrefour CIC
Sogefi BAK Ramada CBI Eyemaxx Real Estate EQB Casino Guichard-Perrachon CIC
Stabilus EQB Semapa CBI Ferratum EQB Ceconomy Ag EQB
Stern Groep NIBC Ssab OPG Ffp CIC Dia GVC
Volkswagen EQB Stora Enso OPG Finecobank BAK Jeronimo M artins CBI
B anks M em(*) Surteco EQB Grenke EQB Kesko OPG
Aareal Bank EQB The Navigator Company CBI Hypoport Ag EQB M arr BAK
Aktia OPG Tubacex GVC M lp EQB M etro Ag EQB
Alpha Bank IBG Upm-Kymmene OPG Ovb Holding Ag EQB Sligro NIBC
Banca Carige BAK C hemicals M em(*) Patrizia EQB Sonae CBI
Banca M ps BAK Air Liquide CIC Rallye CIC
Banco Sabadell GVC Arkema CIC Tip Tamburi Investment Partners BAK
Banco Santander GVC Avantium NIBC Unipol Gruppo Finanziario BAK
Bankia GVC Brenntag EQB Wendel CIC
Bankinter GVC Fuchs Petrolub EQB Food & Beverage M em(*)
Bbva GVC Holland Colours NIBC Acomo NIBC Bcp CBI Imcd NIBC Atria OPG
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First Sensor AG
General Industrials M em(*) Oriola-Kd OPG Talgo GVC Salini Impregilo BAK
2G Energy EQB Orion OPG Technotrans EQB Sias BAK
Aalberts NIBC Orpea CIC Valmet OPG Sonae Industria CBI
Accell Group NIBC Pihlajalinna OPG Wacker Neuson Se EQB Srv OPG
Ahlstrom OPG Recordati BAK Wärtsilä OPG Tarkett CIC
Arcadis NIBC Silmaasema OPG Zardoya Otis GVC Thermador Groupe CIC
Aspo OPG Terveystalo OPG Industrial Transportation M em(*) Titan Cement IBG
Cembre BAK Household Goods M em(*) Bollore CIC Trevi BAK
Huhtamäki OPG De Longhi BAK Ctt CBI Uponor OPG
Kendrion NIBC Elica BAK Logwin EQB Vicat CIC
Nedap NIBC Fila BAK Insurance M em(*) Vinci CIC
Pöyry OPG M aisons Du M onde CIC Allianz EQB Volkerwessels NIBC
Prelios BAK Philips Lighting NIBC Axa CIC Yit OPG
Saf-Holland EQB Industrial Engineering M em(*) Banca M ediolanum BAK M edia M em(*)
Serge Ferrari Group CIC Accsys Technologies NIBC Cattolica Assicurazioni BAK Alma M edia OPG
Tkh Group NIBC Aixtron EQB Generali BAK Arnoldo M ondadori Editore BAK
General Retailers M em(*) Alstom CIC Hannover Re EQB Atresmedia GVC
Beter Bed Holding NIBC Ansaldo Sts BAK M apfre Sa GVC Axel Springer EQB
Elumeo Se EQB Biesse BAK M unich Re EQB Brill NIBC
Fielmann EQB Caf GVC Sampo OPG Cairo Communication BAK
Fnac Darty CIC Cargotec Corp OPG Talanx Group EQB Cofina CBI
Folli Follie Group IBG Carraro BAK Unipolsai BAK Cts Eventim EQB M aterials, Construction & Fourlis Holdings IBG Cnh Industrial BAK M em(*) Digital Bros BAK Infrastructure Grandvision NIBC Danieli BAK Abertis GVC Gedi Gruppo Editoriale BAK
Hornbach Holding EQB Datalogic BAK Acs GVC Gl Events CIC
Inditex GVC Deutz Ag EQB Aena GVC Impresa CBI
Jumbo IBG Duerr EQB Aeroports De Paris CIC Iol BAK
Ovs BAK Emak BAK Astaldi BAK Ipsos CIC
Rapala OPG Envipco NIBC Atlantia BAK Jcdecaux CIC
Stockmann OPG Exel Composites OPG Boskalis Westminster NIBC Lagardere CIC
Takkt Ag EQB Fincantieri BAK Buzzi Unicem BAK M 6-M etropole Television CIC
Tokmanni OPG Gea Group EQB Caverion OPG M ediaset BAK
Unieuro BAK Gesco EQB Cramo OPG M ediaset Espana GVC
Windeln.De EQB Heidelberger Druck EQB Eiffage CIC Notorious Pictures BAK
Yoox Net-A-Porter BAK Ima BAK Ellaktor IBG Nrj Group CIC
Zalando EQB Indus Holding Ag EQB Eltel OPG Publicis CIC
H ealthcare M em(*) Interpump BAK Ezentis GVC Rcs M ediagroup BAK
4Sc EQB Koenig & Bauer EQB Fcc GVC Relx NIBC
Abivax NIBC Kone OPG Ferrovial GVC Rtl Group EQB
Advicenne NIBC Konecranes OPG Heidelberg Cement Ag CIC Sanoma OPG
Amplifon BAK Krones Ag EQB Heijmans NIBC Solocal Group CIC
Bayer EQB M anitou CIC Imerys CIC Spir Communication CIC
Biotest EQB M anz Ag EQB Lafargeholcim CIC Syzygy Ag EQB
Diasorin BAK M ax Automation Ag EQB Lehto OPG Teleperformance CIC
El.En. BAK M etso Corporation OPG Lemminkäinen OPG Tf1 CIC
Epigenomics Ag EQB Outotec OPG M aire Tecnimont BAK Ubisoft CIC
Genfit CIC Pfeiffer Vacuum EQB M ota Engil CBI Vivendi CIC
Gerresheimer Ag EQB Ponsse OPG Obrascon Huarte Lain GVC Wolters Kluwer NIBC
Guerbet CIC Prima Industrie BAK Ramirent OPG Xing Ag EQB
Heidelberg Pharma EQB Prysmian BAK Royal Bam Group NIBC
Korian CIC Schaltbau Holding Ag EQB Sacyr GVC M erck EQB Smt Scharf Ag EQB Saint Gobain CIC
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Oil & Gas Producers M em(*) Hispania Activos Inmobiliarios GVC Lassila & Tikanoja OPG I Grandi Viaggi BAK
Eni BAK Igd BAK Openjobmetis BAK Ibersol CBI
Galp Energia CBI Lar España GVC Rai Way BAK Int. Airlines Group GVC T echno lo gy H ardware & Gas Plus BAK M erlin Properties GVC M em(*) Intralot IBG Equipment Hellenic Petroleum IBG Realia GVC Asm International NIBC Kotipizza OPG M aurel Et Prom CIC Technopolis OPG Asml NIBC M elia Hotels International GVC
M otor Oil IBG Wcm Ag EQB Besi NIBC Nh Hotel Group GVC Neste Corporation OPG Software & Computer Services M em(*) Ericsson OPG Opap IBG
Qgep CBI Affecto OPG Gigaset EQB Snaitech BAK
Repsol GVC Akka Technologies CIC Nokia OPG Snowworld NIBC Total CIC Alten CIC Roodmicrotec NIBC Sodexo CIC
Oil Services M em(*) Altran CIC S&T Ag EQB Sonae Capital CBI Bourbon CIC Assystem CIC Slm Solutions EQB Trigano CIC
Cgg CIC Atos CIC Stmicroelectronics BAK Utilities M em(*)
Fugro NIBC Axway Software CIC Suess M icrotec EQB Acciona GVC Rubis CIC Basware OPG Teleste OPG Acea BAK
Saipem BAK Comptel OPG Va-Q-Tec EQB Albioma CIC Sbm Offshore NIBC Ctac NIBC Telecommunications M em(*) Direct Energie CIC
Technipfmc Plc CIC Digia Plc OPG 1&1 Drillisch Ag EQB Edp CBI Tecnicas Reunidas GVC Econocom CIC Acotel BAK Edp Renováveis CBI
Tenaris BAK Esi Group CIC Bouygues CIC Enagas GVC
Vallourec CIC Exprivia BAK Deutsche Telekom EQB Endesa GVC Vopak NIBC F-Secure OPG Dna OPG Enel BAK
Personal Goods M em(*) Gft Technologies EQB Elisa OPG Erg BAK Adidas EQB Ict Group NIBC Euskaltel GVC Eydap IBG
Adler M odemaerkte EQB Indra Sistemas GVC Freenet EQB Falck Renewables BAK Amer Sports OPG Nemetschek Se EQB Iliad CIC Fortum OPG
Basicnet BAK Neurones CIC Kpn Telecom NIBC Gas Natural Fenosa GVC
Cie Fin. Richemont CIC Nexus Ag EQB M asmovil GVC Hera BAK Geox BAK Novabase CBI Nos CBI Iberdrola GVC
Gerry Weber EQB Ordina NIBC Orange CIC Iren BAK Hermes Intl. CIC Psi Software Ag EQB Ote IBG Italgas BAK
Hugo Boss EQB Reply BAK Retelit BAK Public Power Corp IBG Kering CIC Rib Software EQB Tele Columbus EQB Red Electrica De Espana GVC
Luxottica BAK Rovio Entertainment OPG Telecom Italia BAK Ren CBI
Lvmh CIC Scout24 EQB Telefonica GVC Snam BAK M arimekko OPG Seven Principles Ag EQB Telefonica Deutschland EQB Terna BAK
M oncler BAK Sii CIC Telia OPG Puma EQB Software Ag EQB Tiscali BAK
Safilo BAK Sopra Steria Group CIC United Internet EQB
Salvatore Ferragamo BAK Tieto OPG Vodafone BAK Sarantis IBG Tomtom NIBC Travel & Leisure M em(*)
Swatch Group CIC Support Services M em(*) Accor CIC Technogym BAK Amadeus GVC Aegean Airlines IBG
Tod'S BAK Asiakastieto Group OPG Air France Klm CIC Real Estate M em(*) Batenburg NIBC Autogrill BAK
Adler Real Estate EQB Cellnex Telecom GVC Beneteau CIC
Beni Stabili BAK Dpa NIBC Compagnie Des Alpes CIC Citycon OPG Ei Towers BAK Elior CIC
Demire EQB Enav BAK Europcar CIC Deutsche Euroshop EQB Fiera M ilano BAK Finnair OPG Grivalia IBG Inwit BAK Gamenet BAK
LEGEND: BAK: Banca Akros; CIC: CM CIC Market Solutions; CBI: Caixa-Banco de Investimento; GVC: GVC Gaesco Beksa, SV, SA; EQB: equinet bank; IBG: Investment Bank of Greece, NIBC: NIBC Bank N.V: OPG: OP Corporate Bank:;as of 4th April 2018
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First Sensor AG
List of ESN Analysts (**)
Artur Amaro CBI +351 213 89 6822 [email protected] Konstantinos Manolopoulos IBG +30 210 817 3388 [email protected] Stefan Augustin EQB +49-69-58997-430 [email protected] Katharina Mayer EQB +49 69 58997-432 [email protected] Helena Barbosa CBI +351 21 389 6831 [email protected] Fanny Meindre, PhD CIC +33 1 53 48 80 84 [email protected] Winfried Becker EQB +49 69 58997-416 [email protected] Marietta Miemietz CFA EQB +49-69-58997-439 [email protected] Javier Bernat GVC +34 91 436 7816 [email protected] Dustin Mildner EQB +49 69 58997-438 [email protected] Dimitris Birbos IBG +30 210 81 73 392 [email protected] Henri Parkkinen OPG +358 10 252 4409 [email protected] Agnès Blazy CIC +33 1 53 48 80 67 [email protected] Victor Peiro Pérez GVC +34 91 436 7812 [email protected] Rafael Bonardell GVC +34 91 436 78 71 [email protected] Alexandre Plaud CIC +33 1 53 48 80 90 [email protected] Andrea Bonfà BAK +39 02 4344 4269 [email protected] Francis Prêtre CIC +33 4 78 92 02 30 [email protected] Jean-Baptiste Bouchet CIC +33 1 53 48 80 69 [email protected] Francesco Previtera BAK +39 02 4344 4033 [email protected] Christian Bruns EQB +49 69 58997 415 [email protected] Jari Raisanen OPG +358 10 252 4504 [email protected] Giada Cabrino, CIIA BAK +39 02 4344 4092 [email protected] Hannu Rauhala OPG +358 10 252 4392 [email protected] Niclas Catani OPG +358 10 252 8780 [email protected] Matias Rautionmaa OPG +358 10 252 4408 [email protected] Pierre Chedeville CIC +33 1 53 48 80 97 [email protected] Eric Ravary CIC +33 1 53 48 80 71 [email protected] Emmanuel Chevalier CIC +33 1 53 48 80 72 [email protected] Iñigo Recio Pascual GVC +34 91 436 7814 [email protected] David Da Maia CIC +33 1 53 48 89 36 [email protected] John David Roeg NIBC +31 (0)20 550 86 46 [email protected] Edwin de Jong NIBC +312 0 5508569 [email protected] Jean-Luc Romain CIC +33 1 53 48 80 66 [email protected] Martijn den Drijver NIBC +312 0 5508636 [email protected] Vassilis Roumantzis IBG +30 2108173394 [email protected] Christian Devismes CIC +33 1 53 48 80 85 [email protected] Zafer Rüzgar EQB +49 69 58 99 74 12 [email protected] Andrea Devita, CFA BAK +39 02 4344 4031 [email protected] Antti Saari OPG +358 10 252 4359 [email protected] Enrico Esposti, CIIA BAK +39 02 4344 4022 [email protected] Paola Saglietti BAK +39 02 4344 4287 [email protected] Rafael Fernández de Heredia GVC +34 91 436 78 08 [email protected] Francesco Sala BAK +39 02 4344 4240 [email protected] Gabriele Gambarova BAK +39 02 43 444 289 [email protected] Tim Schuldt, CFA EQB +49 69 5899 7433 [email protected] Eduardo Garcia Arguelles GVC +34 914 367 810 [email protected] Cengiz Sen EQB +4969 58997 435 [email protected] Alexandre Gérard CIC +33 1 53 48 80 93 [email protected] Pekka Spolander OPG +358 10 252 4351 [email protected] Philipp Häßler, CFA EQB +49 69 58997 414 [email protected] Kimmo Stenvall OPG +358 10 252 4561 [email protected] Simon Heilmann EQB +49 69 58 997 413 [email protected] Natalia Svyrou-Svyriadi IBG +30 210 81 73 384 [email protected] Dr. Knud Hinkel, CFA EQB + 49 69 58997 419 [email protected] Manuel Tanzer, CFA EQB +49 69 58997-418 [email protected] Ebrahim Homani CIC +33 1 53 48 80 87 [email protected] Luigi Tramontana BAK +39 02 4344 4239 [email protected] Carlos Jesus CBI +351 21 389 6812 [email protected] Johan van den Hooven NIBC +312 0 5508518 [email protected] Mark Josefson EQB +4969-58997-437 [email protected] Dylan van Haaften NIBC +312 0 611915485 [email protected] Jean-Christophe Lefèvre-Moulenq CIC +33 1 53 48 80 65 [email protected] Sebastian Winkler NIBC +31 6 21 16 17 94 [email protected] João Miguel Lourenço CBI +35 121 389 6841 [email protected]
(**) excluding: strategists, macroeconomists, heads of research not covering specific stocks, credit analysts, technical analysts
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Recommendations and Disclosures Coverage Analyst Target Rating Disc. Coverage Analyst Target Rating Disc. 1&1 DRILLISCH AG Sen 66.00 Buy Merck Miemiet z 112.00 Buy 2G Energy Rüzgar 23.50 Accumulat e 2/ 3/ 5 Merkur Bank Häßler 10.00 Buy 2/ 7 Aareal Bank Häßler 42.00 Neut ral Met ro AG Bruns 17.00 Buy 2 adidas Josef son 228.00 Accumulat e MLP Häßler 7.50 Buy 2/ 3 Adler Modemaerkte Josef son 6.35 Buy 7 MTU Aero Engines Rüzgar 130.00 Reduce 2 ADLER Real Est at e Mayer 17.10 Accumulat e Munich Re Häßler 210.00 Accumulat e Aixt ron Sen 11.60 Accumulat e 2/ 3 Nemet schek SE Mildner 47.00 Reduce 5 Allianz Häßler 200.00 Neut ral Nexus AG Mildner 28.00 Buy Axel Springer Josef son 66.50 Reduce Norma Group Schuldt 62.00 Neut ral Bayer Miemiet z 118.00 Buy OHB SE Rüzgar 40.00 Neut ral 7 Baywa Bruns 33.00 Buy 2/ 7 OVB Holding AG Häßler 20.00 Neut ral 2/ 5/ 7 BB Biot ech Miemiet z 73.00 Buy 7 Pat rizia Mayer 18.00 Neut ral Biot est Miemiet z 25.00 Neut ral 2/ 3 Pfeiffer Vacuum Sen 162.00 Buy 5 BMW Schuldt 105.00 Buy Procredit Holding Häßler 15.00 Buy 2/ 3/ 5 Brennt ag Hinkel 59.80 Buy 2 PSI SOFTWARE AG Mildner 20.00 Buy 2/ 3 Ceconomy AG Bruns 10.70 Reduce Puma Josef son 492.00 Buy Cenit Mildner 22.50 Buy PWO Schuldt 52.00 Buy 2/ 3 comdirect Häßler 11.20 Neut ral Rheinmetall Rüzgar 118.00 Neut ral Commerzbank Häßler 13.00 Neut ral RIB Software Mildner 25.00 Buy 2/ 3 Continental Schuldt 270.00 Buy RTL Group Josef son 72.00 Accumulat e CORESTATE Capit al Holding S.A. Mayer 72.00 Buy 2/ 5 S&T AG Sen 21.00 Buy 2/ 3 CTS Event im Heilmann 39.50 Neut ral SAF-Holland Schuldt 17.00 Neut ral 7 Daimler AG Schuldt 80.00 Accumulat e Schaef f ler Tanzer 14.30 Buy Daldrup & Soehne Becker 14.50 Buy 2/ 3/ 5 Schaltbau Holding AG Becker 32.20 Buy 2/ 7 Demire Mayer 4.55 Buy 2/ 5 SCOUT24 Heilmann 31.00 Reduce 2 Deut sche Bank Häßler 14.00 Buy Siegfried Holding AG Miemiet z 338.00 Neut ral Deut sche EuroShop Mayer 33.00 Neut ral Siemens Healt hineers AG Rüzgar 35.50 Accumulat e 2 Deutsche Pfandbriefbank Häßler 13.50 Neut ral SLM Solutions Sen 24.00 Sell Deut sche Telekom Sen 13.30 Neut ral SMT Scharf AG Rüzgar 16.70 Buy 2/ 3 Duerr August in 120.00 Buy Software AG Mildner 30.00 Sell ElringKlinger Schuldt 10.00 Sell St abilus Tanzer 91.00 Buy elumeo SE Josef son 10.90 Accumulat e Suedzucker Bruns 12.00 Sell Epigenomics AG Miemiet z 4.72 Accumulat e 2/ 3 Suess MicroTec Sen 13.80 Accumulat e 2/ 3 Euromicron AG Becker 13.00 Buy 2/ 3/ 5 Surt eco Mildner 30.50 Buy 2/ 3 Eyemaxx Real Est at e Mayer 16.00 Buy 2/ 5/ 7 Symrise AG Hinkel 67.00 Neut ral Ferrat um Häßler 30.00 Buy Syzygy AG Heilmann 11.50 Accumulat e 2/ 3 Fielmann Heilmann 70.00 Neut ral TAKKT AG Bruns 18.50 Neut ral 2 First Sensor AG Becker 27.00 Accumulat e 7 Talanx Group Häßler 40.00 Accumulat e Freenet Sen 36.00 Buy 2 Technotrans Becker 45.70 Neut ral 2/ 3 Fuchs Petrolub Hinkel 48.00 Neut ral TELE COLUMBUS Sen 9.70 Buy Gea Group August in 39.00 Neut ral Telefonica Deutschland Sen 3.40 Sell Gerresheimer AG Rüzgar 69.00 Neut ral United Internet Sen 63.00 Buy Gerry Weber Josef son 8.00 Neut ral Vapiano Bruns 26.50 Buy 2/ 7 Gesco Becker 34.20 Accumulat e 2/ 3/ 5 va-Q-t ec Sen 17.00 Neut ral 2/ 3/ 5 GFT Technologies Mildner 15.50 Buy 2/ 3 Viscom Rüzgar 28.00 Buy 2/ 3 Gigaset Sen 0.85 Accumulat e 2/ 3 Volkswagen Schuldt 162.00 Neut ral Grenke Häßler 90.00 Neut ral Wacker Neuson SE Becker 27.20 Neut ral Hannover Re Häßler 110.00 Neut ral windeln.de Josef son 3.10 Buy 2 Heidelberg Pharma Miemiet z 3.50 Accumulat e 2/ 3 XING SE Heilmann 300.00 Buy Heidelberger Druck August in 3.60 Buy Zalando Josef son 44.50 Neut ral HELLA GmbH & Co. KGaA Tanzer 57.00 Accumulat e Hornbach Holding Bruns 89.00 Buy Hugo Boss Josef son 81.00 Buy Hypoport AG Häßler 172.00 Accumulat e 2/ 7 INDUS Holding AG Becker 64.50 Neut ral K+S AG Hinkel 24.40 Neut ral Koenig & Bauer August in 72.00 Neut ral Krones AG August in 123.00 Accumulat e KWS SAAT Hinkel 348.00 Buy Lanxess Hinkel 83.00 Buy Leoni Schuldt 57.00 Neut ral Linde Hinkel 176.00 Neut ral Logwin Mildner 148.00 Neut ral 2/ 3/ 5 Manz AG Rüzgar 37.00 Neut ral 2/ 3 MAX Aut omat ion AG Becker 9.40 Buy 2/ 3/ 5
* = Coverage suspended Source: equinet Recommendations
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Notice according to § 34 b (German) Securities Trading Act (“Wertpapierhandelsgesetz”)
This document is issued by Equinet Bank AG (“Equinet Bank”). It has been prepared by its authors independently of the Company, and none of Equinet Bank, the Company or its shareholders has independently verified any of the information given in this document.
Equinet Bank possesses relations to the covered companies as detailed in the table on the previous page. Additional information and disclosures will be made available upon request and/or can be looked up on our website http://www.Equinet Bank-ag.de
1 - Equinet Bank and/or its affiliate(s) hold(s) more than 5% of the share capital of this company calculated under computational methods required by German law.
2 - Equinet Bank acts as a designated sponsor for this company, including the provision of bid and ask offers. Therefore, we regularly possess shares of the company in our proprietary trading books. Equinet Bank receives a commission from the company for the provision of the designated sponsor services.
3 – The designated sponsor services include a contractually agreed provision of research services.
4 – Within the last twelve months, Equinet Bank was involved as a lead or co-lead manager in the public offering of securities which are/whose issuer is the subject of this report.
5 – Within the last twelve months, Equinet Bank and/or its affiliate(s) provided investment banking- and/or other consultancy services for this company and/or it’s shareholders.
6 - Equinet Bank and/or its affiliate(s) has/have other substantial financial interests in relation to this issuer.
7 – Equinet Bank has entered into an agreement with this company about the preparation of research reports and – in return - receives a compensation.
Companies of the Equinet Bank group and/or its directors, officers and employees or clients may take positions in, and may make purchases and/or sales as principal or agent in the securities or related financial instruments discussed in our reports. The Equinet Bank group may provide investment banking and other services to and/or serve as directors of the companies referred to in our reports.
In compliance with Para 5 Sec. 4 of the Ordinance on the Analysis of Financial Instruments (FinAnV) Equinet Bank has realized additional internal and organizational measures, such as specific research guidelines, to prevent or manage conflicts of interest.
Neither the company nor its employees are allowed to receive donations from third parties with a special interest in the content of the analysis.
The salary of the research analysts of Equinet Bank AG does not depend on the investment banking transactions of the company. Nevertheless, this does not rule out the payment of a bonus which depends on the overall financial performance of the bank.
Particular care is taken that the individual performance of each research analyst of Equinet Bank AG is not being assessed by a manager of another business division with similar or same interests.
To assure a highest degree of transparency Equinet Bank AG regularly provides - on a quarterly basis – a summary according to Para 5 Sec. 4 No. 3 of the Ordinance on the Analysis of Financial Instruments (FinAnV). It informs about the overall analysts recommendations and sets them in a relationship to those companies, for which Equinet Bank provided investment banking services within the last twelve months. This summary is published via our website http://www.Equinet Bank-ag.de.
Furthermore, we refer to our conflict of interest policy as well as the German Securities Trading Act (WpHG) and the Ordinance on the Analysis of Financial Instruments (FinAnV) provided in the download area of our website http://www.Equinet Bank-ag.de.
Remarks
Recommendation System Buy - The stock is expected to generate a total return of over 20% during the next 12 months time horizon. Accumulate - The stock is expected to generate a total return of 10% to 20% during the next 12 months time horizon. Hold - The stock is expected to generate a total return of 0% to 10% during the next 12 months time horizon Reduce - The stock is expected to generate a total return of 0 to -10% during the next 12 months time horizon Sell - The stock is expected to generate a total return below -10% during the next 12 months time horizon
Basis of Valuation Equinet Bank uses for valuation purposes primarily DCF-Valuations and Sum-Of-The-Parts-Valuations as well as peer group comparisons.
Share prices Share prices in this analysis are the German closing prices of the last trading day before the publication.
Sources Equinet Bank has made any effort to carefully research all information contained in the analysis. The information on which the analysis is based has been obtained from sources which we believe to be reliable such as, for example, Reuters, Bloomberg and the relevant press as well as the company which is the subject of the analysis. Only that part of the research note is made available to the issuer, who is the subject of the analysis, which is necessary to properly reconcile with the facts. Should this result in considerable changes a reference is made in the research note.
Actualizations Opinions expressed in this analysis are our current opinions as of the issuing date indicated on this document. We do not commit ourselves in advance to whether and in which intervals updates are made.
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First Sensor AG
DISCLAIMER
THE PREPARATION OF THIS DOCUMENT IS SUBJECT TO REGULATION BY GERMAN LAW. THIS DOCUMENT IS BEING SUPPLIED TO YOU SOLELY IN YOUR CAPACITY AS A PROFESSIONAL INSTITUTIONAL INVESTOR FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. NEITHER THIS DOCUMENT NOR ANY COPY OF IT MAY BE TAKEN OR TRANSMITTED INTO AUSTRALIA, CANADA OR JAPAN OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA OR JAPAN OR TO ANY RESIDENT THEREOF.
THE DELIVERY OF THIS RESEARCH REPORT TO U.S. PERSONS IN THE UNITED STATES OF AMERICA IS MADE BY AND UNDER THE RESPONSIBILITY OF GSN NA, INC. (REGISTERED WITH THE SEC). THIS RESEARCH REPORT IS ONLY INTENDED FOR PERSONS WHO QUALIFY AS MAJOR U.S. INSTITUTIONAL INVESTORS, AS DEFINED IN SECURITIES EXCHANGE ACT RULE 15A-6, AND DEAL WITH GSN NA, INC. HOWEVER, THE DELIVERY OF THIS RESEARCH REPORT OR SUMMARY TO ANY U.S. PERSON SHALL NOT BE DEEMED A RECOMMENDATION OF GSN NA, INC. TO EFFECT ANY TRANSACTIONS IN THE SECURITIES DISCUSSED HEREIN OR AN ENDORSEMENT OF ANYOPINION EXPRESSED HEREIN. GSN NA, INC. MAY FURNISH UPON REQUEST ALL INVESTMENT INFORMATION AVAILABLE TO IT SUPPORTING ANY RECOMMENDATIONS MADE IN THIS RESEARCH REPORT. ALL TRADES WITH U.S. RECIPIENTS OF THIS RESEARCH SHALL BE EXECUTED THROUGH GSN NA, INC.
THIS DOCUMENT IS FOR DISTRIBUTION IN THE U.K. ONLY TO PERSONS WHO HAVE PROFESSSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”) OR (ii) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, NAMELY HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS DOCUMENT MUST NOT BE ACTED ON OR RELIED UPON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS DOCUMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
THE DISTRIBUTION OF THIS DOCUMENT IN OTHER JURISDICTIONS OR TO RESIDENTS OF OTHER JURISDICTIONS MAY ALSO BE RESTRICTED BY LAW, AND PERSONS INTO WHOSE POSSESSION THIS DOCUMENT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, ANY SUCH RESTRICTIONS. BY ACCEPTING THIS REPORT YOU AGREE TO BE BOUND BY THE FOREGOING INSTRUCTIONS. YOU SHALL INDEMNIFY EQUINET BANK AGAINST ANY DAMAGES, CLAIMS, LOSSES, AND DETRIMENTS RESULTING FROM OR IN CONNECTION WITH THE UNAUTHORIZED USE OF THIS DOCUMENT.
This report is for informational purposes only and has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. This publication is intended to provide information to assist institutional investors in making their own investment decisions, not to provide investment advice to any specific investor. Therefore, investments discussed and recommendations made herein may not be suitable for all investors: readers must exercise their own inde-pendent judgment as to the suitability of such investments and recommendations in the light of their own investment objectives, experience, taxation status and financial position.
The information herein is believed by Equinet Bank to be reliable and has been obtained from sources believed to be reliable, but Equinet Bank makes no representation as to the accuracy or completeness of such information. The information given in this report is subject to change without notice; it may be incomplete or condensed and it may not contain all material information concerning the Company. Opinions expressed herein may differ or be contrary to opinions expressed by other business areas of the Equinet Bank group as a result of using different assumptions and criteria. Equinet Bank is under no obligation to update or keep the information current. Equinet Bank provides data concerning the future development of securities in the context of its usual research activity. However, if a financial instrument is denominated in a currency other than an investor’s currency, a change in exchange rates may adversely affect the price or value of, or the income derived from, the financial instrument, and such investor effectively assumes currency risk. In addition, income from an investment may fluctuate and the price or value of financial instruments de-scribed in this report, either directly or indirectly, may rise or fall. Furthermore, past performance is not necessarily indicative of future results. Neither the author nor Equinet Bank accepts any liability whatsoever for any loss howsoever arising from any use of this publication or its contents or otherwise arising in connection herewith, except as provided for under applicable regulations.
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Competent Supervisory Authority: Bundesanstalt für Finanzdienstleistungsaufsicht -BaFin- (Federal Financial Supervisory Authority) Graurheindorfer Straße 108, 53117 Bonn and Marie-Curie-Str. 24-28, 60439 Frankfurt am Main
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Recommendation history for FIRST SENSOR AG
Date Recommendation Target price Price at change date 17. Mai 18 Accumulate 27.00 23.90
Source: Factset & ESN, price data adjusted for stock splits. This chart shows equinet Bank continuing coverage of this stock; the current analyst may or may not have covered it over the entire period. Current analyst: Winfried Becker (since 25/04/2018)
32 30 28 26 24 22 20 18 16 14 12 10 8 Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan Feb Mrz Apr Mai 17 17 17 17 17 17 17 17 17 18 18 18 18 18
Price history Target price history Buy Accumulat Neut Reduce Sell Not rated
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First Sensor AG
ESN Recommendation System
The ESN Recommendation System is Absolute. It means that each stock is rated on the basis of a total return, measured by the upside potential (including dividends and capital reimbursement) over a 12 month time horizon.
The ESN spectrum of recommendations (or ratings) for each stock comprises 5 categories: Buy (B), Accumulate (A), Neutral (N), Reduce (R) and Sell (S). Furthermore, in specific cases and for a limited period of time, the analysts are allowed to rate the stocks as Rating Suspended (RS) or Not Rated (NR), as explained below. Meaning of each recommendation or rating:
Buy: the stock is expected to generate total return of over 15% during the next 12 months time horizon Accumulate: the stock is expected to generate total return of 5% to 15% during the next 12 months time horizon Neutral: the stock is expected to generate total return of -5% to +5% during the next 12 months time horizon Reduce: the stock is expected to generate total return of -5% to -15% during the next 12 months time horizon Sell: the stock is expected to generate total return under -15% during the next 12 months time horizon Rating Suspended: the rating is suspended due to a change of analyst covering the stock or a capital operation (take-over bid, SPO, …) where the issuer of the document (a partner of ESN) or a related party of the issuer is or could be involved Not Rated: there is no rating for a company being floated (IPO) by the issuer of the document (a partner of ESN) or a related party of the issuer
Certain flexibility on the limits of total return bands is permitted especially during higher phases of volatility on the markets
Equinet Bank Ratings Breakdown
Reduce Sell 4% 4% Buy 42%
Neutral 33% Accumulate 17%
For full ESN Recommendation and Target price history (in the last 12 months) please see ESN Website Link Date and time of production: 17 May 2018: 19:30 CET First date and time of dissemination: 17 May 2018: 19:35 CET
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First Sensor AG
Disclaimer: These reports have been prepared and issued by the Members of European Securities Network LLP (‘ESN’). ESN, its Members and their affiliates (and any director, officer or employee thereof), are neither liable for the proper and complete transmission of these reports nor for any delay in their receipt. Any unauthorised use, disclosure, copying, distribution, or taking of any action in Members of ESN (European Securities Network LLP) reliance on these reports is strictly prohibited. The views and expressions in the reports are expressions of opinion and are given in good faith, but are subject to change without notice. These reports may not be reproduced in whole or in part or passed to third parties without permission. The information herein was obtained from various sources. 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They do not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive any of these reports. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in these reports and should understand that statements regarding future prospects may not be realised. Investors should note that income from such securities, if any, may fluctuate and that Caixa-Banco de Investimento Investment Bank of Greece each security’s price or value may rise or fall. Accordingly, investors may Avenida João XXI, 63 32 Aigialeias Str & Paradissou, receive back less than originally invested. Past performance is not necessarily a 1000-300 Lisboa 151 25 Maroussi, guide to future performance. Foreign currency rates of exchange may adversely Portugal Greece affect the value, price or income of any security or related investment mentioned Phone: +351 21 313 73 00 Phone: +30 210 81 73 383 in these reports. In addition, investors in securities such as ADRs, whose value Fax: +351 21 389 68 98 are influenced by the currency of the underlying security, effectively assume currency risk. ESN, its Members and their affiliates may submit a pre-publication draft (without mentioning neither the recommendation nor the target price/fair value) of its reports for review to the Investor Relations Department of the issuer forming the subject of the report, solely for the purpose of correcting any inadvertent material inaccuracies. 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This Gräfstraße 97 P.O.Box 308 document is for distribution in the U.K. Only to persons who have professional 60487 Frankfurt am Main Teollisuuskatu 1, 00013 Helsinki experience in matters relating to investments and fall within article 19(5) of the Germany Finland financial services and markets act 2000 (financial promotion) order 2005 (the Phone:+49 69 – 58997 – 212 Phone: +358 10 252 011 “order”) or (ii) are persons falling within article 49(2)(a) to (d) of the order, Fax:+49 69 – 58997 – 299 Fax: +358 10 252 2703 namely high net worth companies, unincorporated associations etc. (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied upon by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. 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